KU Annual Report 2010 - Page 25

The following estimated useful lives are used in the calculation of depreciation: • Buildings 40 years • Buildings – fixtures and fittings 4-10 years • Plant, furniture and equipment 4-10 years • Motor vehicles 6.7 years d) Employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave and rostered days off when it is probable that settlement will be required and they are capable of being measured reliably. Liabilities recognised in respect of employee benefits expected to be settled within 12 months are measured using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the company in respect of services provided by employees up to reporting date. e) Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or ii) for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows. f) Financial assets Investments are recognised and derecognised on trade date, where purchase or sale of an investment is under a contract, whose terms require delivery of the investment within the timeframe established by the market concerned. They are initially measured at fair value, net of transaction costs except for those financial assets classified at fair value through profit or loss, which are initially measured at fair value Financi al assets are classified into the following specified categories: financial assets ‘available-for-sale’ and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Loans and receivables Trade receivables, loans, and other receivables are recorded at amortised cost using the effective interest rate method less impairment. Available-for-sale financial assets The Unit trust investment is classified as being available-for-sale and is stated at fair value less impairment. Fair value is determined using the closing market prices at year end. Gains and losses arising from changes in fair value are recognised directly in the available-for-sale revaluation reserve, until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in the available-for-sale revaluation reserve is included in profit or loss for the period. Impairment of financial assets Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. g) Impairment of long lived assets At each reporting date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 115th Annual Report 2010 25