KU Financial Report
p) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be
made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the
present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
q) Unearned income
The liability for unearned income is the unutilised amounts of grants received on the condition that specified
services are delivered or conditions are fulfilled. The services are usually provided or the conditions usually fulfilled
within 12 months of receipt of the grant. Where the amount received is in respect of services to be provided over
a period that exceeds 12 months after the reporting date or the conditions will only be satisfied more than 12
months after the reporting date, the liability is discounted and presented as non-current.
4. Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and other various factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period or in the period of
the revision and future periods if the revision affects both current and future periods. The following are the critical
judgements that management has made in the process of applying the Company’s accounting policies and that
have the most significant effect on the amounts recognised in the consolidated financial statements:
4.1 Employee entitlements
Management judgement is applied in determining the following key assumptions used in the calculation of long
service leave at balance date:
• future increases in wages and salaries;
• future on-cost rates; and
• experience of employee departures and period of service including future years in which long service leave is
expected to be taken.
5a. Changes in Accounting Policies - Restatement
In 2014, the Company restated its 2013 results due to the following changes in accounting policies:
1) Disclosure of Profit and Loss by function rather than by nature;
2) Accounting for Work Based Services as a Principal under the contract in providing these services.
The impact of the restatement on each of the affected financial statement line items is as follows
Statement of Financial Position as at December 2013
Previous amount
$
Current assets
Cash and cash equivalents
27,193,392
Trade and other receivables *
4,233,524
Other financial assets
-
Other assets
537,583
Non-current assets
Property, plant & equipment *
14,263,977
Intangible assets *
444,340
Current liabilities
Trade and other payables *
8,637,495
Finance leases
338,587
Unearned income *
6,996,433
Provisions
11,142,005
Total non-current liabilities
Provisions
2,074,141
Net Assets
17,484,155
Funds
General funds
15,379,384
Fundraising reserve
1,254,771
Program reserve
850,000
Total
17,484,155
* These accounts also had reclassifications between them in the restatement
Adjustment
$
Restated amount
$
4,087,699
(1,691,298)
-
47,639 31,281,091
2,542,226
-
585,222
(41,618)
48,509 14,222,359
492,849
3,431,838
-
(992,082)
(743,608) 12,069,333
338,587
6,004,351
10,398,397
754,783
- 2,828,924
17,484,155
-
-
-
- 15,379,384
1,254,771
850,000
17,484,155
4.2 Leasehold improvements
As described at 3(a) above, the Company reviews the estimated useful lives of property, plant and equipment at the
end of each reporting period.
During the 2013 financial year, the Company reassessed the useful life of leasehold assets. The useful life was
reassessed to equal the lease term, or 10 years where no lease term was applicable. As a result, the Company
brought to account additional depreciation of $1,557,966 in 2013 as referred to in note 5b (v) and note 8.
4.3 Impairment
In assessing impairment, the Company estimates the recoverable amount of each asset based on the depreciable
replacement cost in accordance with AASB 136 “Impairment of assets”.
4.4 Make good provision
Provisions for make good are included, where applicable, using the present value of anticipated costs for future
restoration of leased premises. The provision includes future cost estimates associated with closure of the premises.
119th Annual Report 2014
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