KU Financial Report
2. Summary of Accounting Policies (continued)
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.
e) Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with the recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of property, plant and equipment is the higher of fair value less costs to sell and value in
use. Depreciated replacement cost is used to determine value in use. Depreciated replacement cost is the current
replacement cost of an item of plant and equipment less, where applicable, accumulated depreciation to date,
calculated on the basis of such cost.
f) 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.
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 asset are consumed.
g) Revenue
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of discounts, refunds and amounts collected on behalf of third parties. The Company recognises revenue
when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to
the Company and specific criteria have been met for each of the Company’s activities as described below.
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 - operational
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”.
Government funding - capital
Funds are received from government departments in accordance with contracts to undertake capital works
programs on behalf of the department. In accordance with AASB 1004 “Contributions”, this income is recognised
upfront once control of the funds or the commitment to receive funds has been satisfied.
118th Annual Report 2013