KU Financial Report
Notes to the Financial Statements
Continued...
Where the asset does not generate cash flows that are independent from other assets, the company estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted. If the recoverable amount of an asset (or cash- generating unit) is
estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced
to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset
is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit
or loss immediately unless the relevant asset is carried at fair value, in which case the reversal of the impairment
loss is treated as a revaluation increase.
h) Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards
incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.
Company as lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased
asset are consumed.
Company as lessor
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease.
Lease incentives
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a
liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line
basis, except where another systematic basis is more representative of the time pattern in which economic benefits
from the leased assett are consumed.
i) Revenue
Revenue is measured at the fair value of the consideration received or receivable.
Fundraising
Fundraising is recorded when the income is received or receivable.
Rendering of services
Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract.
Government funding
Government funding agreements are contracted agreements with the Government to provide a variety of early
childhood education and care programs in the community. They are received in the form of transfers of resources
to the company in return for past or future compliance with certain conditions relating to the operating activities of
the company. Non-reciprocal government funding monies, other than monies held in trust, are credited to income
when received in accordance with AASB 1004 “Contributions”. Other service revenues from government agencies
are recognised upon delivery of services in accordance with AASB 118 “Revenue”.
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KU Children’s Services