Chapter 11.7.2 – Property, Plant and Equipment

Purpose and Objectives

This policy outlines the appropriate accounting measures and administration of property, plant and equipment that is managed and owned by our company.

Policy Scope/Coverage

The Head of each organisational unit is responsible for safeguarding property, plant and equipment directly under their control and for ensuring our Company’s policy in respect of those assets are carried out promptly and effectively.

Policy Statement

Our company recognises property, plant and equipment in accordance with:

• Financial and Performance Management Standard 2009
• Australian Accounting Standards
• AASB Framework for the Preparation and Presentation of Financial Statements.
• AASB 116 – Property, Plant and Equipment
• Non-Current Asset Policies for the Queensland Public Sector

Other related information – AASB 5 Non-Current Assets Held for Sale and Discontinued Operations, AASB 117 Leases, AASB 119 Employee Benefits and AASB 136 Impairment of Assets.

Land

The acquisition or disposal of land is authorised by the Chief Financial Officer who would normally receive authority from the authorising party in respect of such transactions.

A register of land holdings is maintained by Corporate Finance.

Buildings

A building is defined as any structure that has a roof. The value of a building includes the cost of the building’s major internal components, for example, lifts, lighting and electrical systems, ducted air conditioning systems, fans and doors; and any fees and other incidental expenditure associated with its construction or purchase excluding demolition and site clearing costs.

The Chief Financial Officer and the Director of Property and Facilities Division would normally receive authority from the authorising party in respect of such transactions.

A register of buildings is maintained for accounting purposes by Corporate Finance.

Progressively during the year, Property and Facilities Division will provide Corporate Finance with details of:

• The purchase and completion of buildings;
• Capital improvements to buildings; and
• The disposal and demolition of buildings.

In addition, Property and Facilities Division will provide details of any buildings donated to our company annually, upon request.

Infrastructure and Land Improvement Assets

The value of our company’s infrastructure and land improvements is recorded on a register maintained by Corporate Finance.

Property and Facilities Division will keep a record of the quantities held of various infrastructure and land improvement elements.

Disposals of infrastructure and land improvements are rare and will be taken up in any revaluation.

Infrastructure assets

Infrastructure assets are long-life physical assets that consist of an entire system or network, which provides the foundation to support our company’s services. An infrastructure asset is primarily stationary in nature, purpose built, with a long useful service life, and is associated with a network or system.

Examples of infrastructure assets include the following:

• Water and Wastewater Systems
• Harbour and Port Facilities
• Lighting Systems
• Wharves
• Dams
• Bus Stations
• Bridges
• Road Networks
• Electricity Supply Systems
• Hangers
• Gas Supply Systems/Networks
• Runways
• Pipelines
• Sewerage Systems
• Rail Network

Land improvement assets

Land improvements are long-life attachments to parcels of land that increase the land’s usefulness or value and have a limited useful life.

Examples of land improvement assets include the following:

• Covered Play Areas
• Roads, Footpaths, Paved Areas
• Fountains
• Outbuildings and Covered Ways
• Landscaping and Improvements
• Stormwater and Sewer Drainage
• Sheds
• Water and Gas Supply
• Parking Lots (bitumen car parks)
• Fire Protection Systems
• Parking Barriers
• Electric Light & Power
• Retaining Walls
• Communication Systems
• Centralised Energy Systems

Plant and Equipment

A register of computing equipment, motor vehicles and other plant and equipment is maintained by Corporate Finance within.

Definition

Plant and equipment, hereafter referred to as equipment, is defined as any item of a permanent nature costing $5,000 (GST exclusive) or more and with a life expectancy of more than one year, except that:

1. Components to be used in the manufacture of an equipment item by an organisational unit are to be regarded as equipment where they meet the above criteria.
2. Items that meet the above criteria and are purchased for inclusion in a formal inventory holding, will not be recognised as equipment until they are issued or sold to organisational units.

The $5,000 (GST exclusive) threshold applies to individual items of equipment except where several related items, when considered collectively, constitute an item of equipment. For example, a piano and matching stool are to be regarded as one item.

Items that do not meet the definition of equipment are to be charged to a relevant expense account.

The following costs do not qualify as equipment and do not form part of the cost of equipment:

• Package software
• Software licenses
• Maintenance agreements which are renewable on a regular basis
• Warranties
• Motor vehicle registration
• Motor vehicle insurance costs

Purchase of equipment

The purchase of plant and equipment by corporate card and reimbursement is specifically prohibited.

Registering equipment

General

All equipment costing $5,000 (GST exclusive) or more is to be recorded in the Asset Management module when:

• Purchased from an external supplier.
• Purchased internally through Information Technology Services or other our company formal inventory holding.
• Constructed internally by an organisational unit of our company.
• Donated to our company by an external party.

Equipment is not to be recorded in the Asset Management module where:

• Equipment costs less than $5,000 (GST exclusive), unless it meets the criteria set out in Portable and Attractive Items policy.
• Equipment is purchased for use by outside organisations.
• Equipment already registered in the Asset Management module is re-sold internally.
• Equipment already registered in the Asset Management module is transferred internally for no charge.

Where a number of payments (for example deposit, instalments, and exchange rate adjustments) are made in respect of an item of equipment, each individual payment is to be recorded using the same Asset ID.

Purchased externally (in the current year)

Where equipment is purchased from an external supplier, it is to be recorded in conjunction with creating and receipting the purchase order and processing the invoice.

Constructed internally

Where equipment is to be constructed internally costs will be recorded against a project code and the asset will be capitalised when completed.

Retiring equipment

The policy governing the disposal of equipment do not have any application in respect of the following:

• Motor vehicles, which are to be disposed of by Fleet Services.

Equipment recorded in the Asset Management module can only be retired from the system when it is no longer in the physical possession of our company, or no future economic benefits are expected from its use or resale. Equipment cannot be retired merely because its depreciated value is less than $5,000, or it is in storage and not being used.

When equipment that is registered in the Asset Management module is either sold or transferred at no cost by one organisational unit to another, it is not retired from the system. These transactions merely represent transfers between organisational units as the equipment at all times remains in the possession of our company.

Organisational units should ensure that sufficient information is retained in their records regarding the process undertaken to dispose of its assets. This documentation should be available for perusal by Internal Audit and/or External Auditors, upon request.

Our company data and software should be removed from all computer equipment prior to disposal.

All retirements must be properly authorised by the Head of the organisational unit.

Donated to body/individual external to our company

When contemplating donating equipment, the Head of the organisational unit must determine that the equipment is no longer of use to their unit, or any other unit in our company, or is unlikely to be so in the future.

When considering the donation of equipment to external bodies/individuals, staff must adhere to the principles of our company’s Code of Conduct.

It is not expected that our company equipment would be donated to current or past employees irrespective of how its purchase was funded.

Organisational units should be aware that the donation of equipment to past, current or future employees may incur a fringe benefit cost.

Organisational units should contact the Taxation team for further information.

After physical possession of the equipment has passed from the organisational unit (the donor) to the recipient, the equipment is to be retired from the Asset Management system.

Traded-in

Refer to Trade on policy.

Sold to body/individual external to the University

General

When considering the sale of equipment to external bodies/individuals, staff must adhere to the principles of our company’s Code of Conduct.

Equipment should be sold for a price at least equivalent to the fair market value.

The costs of advertising, auctioning and any other costs associated with the sale of equipment shall be charged against the appropriate organisational unit account using the relevant expense account, and the GST on the costs of sale is to be recognised in the organisational unit’s GST clearing account.

For disposal by sale, the following general conditions shall apply and the purchaser shall be advised of them prior to the sale:

1. Inspection – The equipment shall be available for inspection by interested parties prior to purchase. Purchasers shall be aware that they purchase the goods at their own risk.
2. No Warranty Given – No warranty shall be given as to the quality of the equipment, or as to its fitness for any particular purpose, and, notwithstanding any representations made in respect of the equipment, it shall be advertised to be sold as and where it lies with all faults and with all errors and misstatements of description, measurement, quality or otherwise and the purchaser shall have no claim against our company in respect of any such faults, errors or misstatements.
3. Notwithstanding the above, all items offered for sale must be in a safe-to-use condition.
4. Payment – Payment for the equipment is to be made by cash, Bpay, direct deposit or bank cheque to our company before removal from our company.
5. Delivery – Unless otherwise agreed, delivery of the equipment shall be effected by the removal of the equipment by and at the expense of the purchaser at the time and from the place specified by our company.
6. Property and Risk – The property and risk in the equipment purchased shall pass to the purchaser immediately upon payment being made for the equipment.

Items recorded in the Asset Management system that are sold to a body/individual external to our company are to be retired from that system.

GST on sale of our company assets (as second hand goods)

Contact the Taxation team for the GST [treatment on the sale of our company assets.

Organisational units should be aware that there are specific GST issues relating to the sale of equipment to staff members. To minimise any potential GST issues it is important that the sale price of any item of our company equipment sold to a staff member or an associate of a staff member be at least equivalent to the fair market value.

Organisational units should ensure that supporting documentation regarding the process undertaken to dispose of its assets (including the assessment of fair market value), is retained in the unit’s records.

Proceeds of external sale

All money received as proceeds from the external sale of equipment is to be deposited with our company Cashier. All bank cheques are to be made payable to our company.

Sold internally

Such transactions are not recorded in the Asset Management system as either additions or retirements of equipment. In terms of the Asset Management system, they are reflected as a change in organisational unit code.

Destroyed (accidentally/cannibalised) or obsolete

The Head of the organisational unit is responsible for ensuring that the disposal of equipment by destruction (including dumping) is carried out.

After, in the case of dumping, physical possession of the equipment has passed from the organisational unit, the equipment has been cannibalised for spare parts, or the equipment has been destroyed, the equipment is to be retired from the Asset Management system.

Returned to the supplier

Where equipment previously recorded in the Asset Management system is returned to the supplier, the equipment is to be retired from the system.

Any refund arising from the return of equipment due to unsuitability etc., is to be credited against the General Ledger account(s) from which the equipment was originally purchased. This applies whether the refund is received by way of credit note (processed through the Accounts Payable System), or a cheque to be deposited with our company Cashier.

Where the credit received for goods returned is less than the amount originally paid a General Ledger Journal is required to transfer the shortfall from the original General Ledger equipment account to a more appropriate expenditure account.

Stolen

Equipment that is stolen is to be retired from the Asset Management system.

Missing assets

An asset should only be marked as missing as part of the stocktake process if it cannot be located after a thorough investigation has been undertaken.

Assets that are recorded as missing in the stocktake will be retired from the Asset Management system in that same year.

Loans

Inward loan, hire and testing

Equipment received on loan, on hire, for testing or for other temporary use is to be recorded by the organisational unit on a register or in some other suitable record. The register is to include, where applicable, name of owner, description of item, date received, location, period of loan or hire, and date of return to owner. An Inward Loan, Hire and Testing Register template can be used for this purpose.

Such items are not to be recorded in the Asset Management system.

Where the loan arrangement stipulates that our company is liable for the loan item(s), the Insurance Office is to be contacted prior to the acceptance of delivery of the item(s).

This section does not apply to equipment that falls under the definition of leased assets.

Outward loan, hire and repair

All loans and hiring of equipment must be approved by the Head of the organisational unit.

Where appropriate, the Head of the organisational unit shall require that a formal agreement be prepared covering the lending of equipment to third parties. A formal agreement is to be prepared in all cases relating to the hiring of equipment. All formal agreements, prior to signing, should be forwarded to the Legal Office to ensure that our company is adequately protected.

In all cases of lending and hiring, a written acknowledgment is to be obtained from the borrower or hirer confirming that the equipment has been received in good order and condition.

Persons taking equipment off premises should be reminded that it is a requirement of our company insurer that all reasonable precautions must be taken to prevent loss, destruction or damage to our company property.

A register is to be kept by the organisational unit in respect of any items on loan, on hire or sent for repairs, to a person or body, including persons or entities within our company. The register is to include, where applicable, the name of borrower, hirer or repairer, description of item, asset ID, date, location, and period of loan or hire. An Outward Loan, Hire and Repair Register template can be used for this purpose.

The register is to be reviewed regularly to ensure that all items are returned within a reasonable period.

Work In Progress

Work in progress is defined as property, plant and equipment under construction, or in the process of being constructed, but yet to meet the recognition criteria of being in the location and condition necessary for it to be capable of operating in the manner intended by management.

The asset recognition threshold is applied on the basis relating to assets that have the same functionality.

A register of work in progress is maintained for accounting purposes by Corporate Finance. At the end of each month, Property and Facilities Division is to provide Corporate Finance with details of buildings and capital improvements under construction.

Leased Assets

AASB 117 Leases requires that assets acquired under finance leases be recognised initially at an amount equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, using the interest rate implicit in the original lease contract as the discount factor. A corresponding liability for the lease payments must also be recorded.

Assets acquired under a finance lease are subject to the same recognition thresholds and revaluation requirements as assets of the class to which the asset would belong if owned or otherwise controlled by our company.

A register of leased assets is maintained for accounting purposes by Corporate Finance.

Assets subject to operating leases are not controlled by our company and must not be recognised as assets.

Leasehold Improvements

Leasehold improvements are attachments to assets subject to finance and operating leases that increase the asset’s usefulness or value, and have a limited useful life.

Leasehold improvements include wall construction, painting, cabling, carpeting, glazing, joinery, built in desks, cabinets and workstations.

A register of leasehold improvements is maintained for accounting purposes by Corporate Finance.

Recognition

An asset is recognised when it is probable that future economic benefits will eventuate from the asset and its cost or value can be reliably measured.

In summary, the asset recognition thresholds are:

• Land – $1
• Buildings – $10,000
• Infrastructure – $10,000
• Land Improvements – $10,000
• Library Collections – $1
• Museum Collections – $1
• Plant and Equipment – $5,000
• Leasehold Improvements – $10,000

Items that fall below the relevant asset recognition threshold are expensed in the year of acquisition.

Actual cost is used for the initial recording of all asset acquisitions. Assets acquired at no cost or for nominal consideration are recognised at their fair value at the date of acquisition.

The cost of property, plant and equipment comprises the purchase price, including duties and non-refundable purchase taxes, plus any costs directly attributable to bringing the equipment to the location and condition necessary for its intended use. Examples of directly attributable costs include but are not limited to the following:

• Costs of employee benefits (as defined in AASB 119 Employee Benefits) arising directly from the construction or purchase of the
• equipment;
• Costs of site preparation;
• Delivery and handling costs;
• Installation and assembly costs;
• Costs of testing whether the asset is functioning properly; and
• Professional fees.

Where a discount or rebate has been received on the purchase of equipment, the discounted cost is to be taken up on the Asset Register.

GST is not included in the cost of an item of property, plant and equipment.

Costs to be expensed in the period in which they are incurred:

• Costs incurred after an item of property, plant and equipment is in the location and condition necessary for it to be capable of being
• operated in the manner intended;
• Costs incurred prior to asset recognition criteria being satisfied;
• General administration costs;
• Indirect overhead costs; and
• Training costs.

Maintenance/Capital Expenditure

When costs are incurred in relation to an existing asset, it is necessary to distinguish between expenditure which relates to “repair and maintenance” of the asset as opposed to “capital improvement” of the asset.

Repairs and maintenance represent work performed to keep an asset in an operating condition, and to ensure that the service originally expected of the asset is obtained. Repairs and maintenance are expensed in the year they are incurred.

Capital improvements increase the asset’s productive capacity, extend the economic life of the asset beyond that originally expected, or reduce the level of operating costs.

Expenditure on capital improvements is identified in respect of buildings, infrastructure assets and land improvement assets. Capital improvements are charged to the relevant asset General Ledger code, capitalised and depreciated on the same basis as the asset to which they relate.

Capital improvements to buildings include major additions and alterations to their shell or structure, for example the addition of an annexe, an additional floor, or a major refurbishment. Alternatively, repairs would include renovations, minor refurbishment, and replacing the internal components of buildings, for example removing and installing new partitions, rewiring, and painting.

Examples of capital improvements to infrastructure and land improvements would include enlarging a dam or lake, laying bitumen on a dirt car park or dirt road, and creating a new playing field. Repairs and maintenance expenditure would include rewiring a cable network, replacing pipes, and resurfacing a road or path.

When expenditure on capital improvements is capitalised the remaining carrying amount of the portion of the asset being “improved” must be derecognised.

Losses and Damages

With respect to loss or damage to property, plant and equipment refer to:

• Insurance
• Reporting of Losses

Impairment

All non-current assets must be assessed for indicators of impairment in accordance with AASB 136 Impairment of Assets.

Impairment is the decline in the future economic benefits or service potential of an asset, over and above the use reflected through depreciation. In general, an asset is impaired when its recoverable amount is less than its carrying amount.

The recoverable amount of an asset is determined as the higher of an asset’s net selling price (fair value less costs to sell) and its value in use.

A review for impairment indicators is performed and documented annually by Corporate Finance. All asset classes are reviewed for indicators of impairment.

Physical assets will only be tested for impairment if there are indicators of impairment. Formal estimates of the recoverable amount of an asset are not required if no indicators of impairment are identified.

If an asset is impaired, it will be written down and an impairment loss recorded. This is applicable to all asset classes with the exception of computing equipment, motor vehicles, and other plant and equipment; when these classes of assets are impaired they are retired as scrapped or written off as damaged. Assets disposed of as damaged will be reported in the Financial Statements as a loss to our company.

Recording an impairment loss

An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revalued amount. When an asset is measured at a revalued amount the impairment loss is to be treated in the same way as a revaluation decrement, i.e. offset against the asset revaluation surplus to the extent available.

Following the recognition of an impairment loss, the depreciation/amortisation charge for the asset is to be adjusted in future periods to allocate the asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.

Reversing an impairment loss

An impairment loss can be reversed for all assets other than goodwill.

At each reporting date, an agency must assess whether there is any indication that a previously recognised impairment loss may no longer exist, or may have decreased. If an indication exists, the agency must again determine recoverable amount.

An impairment loss can only be reversed if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised, i.e.

• A change in the basis for recoverable amount (i.e. whether recoverable amount is based on fair value less costs to sell or value in use);
• If recoverable amount was based on value in use, a change in the amount or timing of estimated future cash flows, or in the discount rate;

or

• If recoverable amount was based on fair value less costs to sell, a change in estimate of the components of fair value less costs to sell.

In reversing an impairment loss the same rules apply as to those when impairment losses are initially recognised, in that the reversal is recognised immediately in profit and loss, unless the asset is carried at a revalued amount in which case the reversal is treated as a revaluation increase.

When reversing the impairment loss of an individual asset the increased carrying amount must not exceed the carrying amount that would have been determined had no impairment loss been recognised. As a result, agencies must ensure that they maintain a record of the value of the asset exclusive of the impairment loss.

Depreciation

Items of property, plant and equipment other than land, work in progress, the library heritage collection, and the museums and other collections (including works of art), are depreciated over their estimated economic useful lives either using the straight line or diminishing value method.

In summary, the depreciation rates and methods used are:

• Buildings – 1% to 10% straight line
• Infrastructure – 1% to 5% straight line
• Land Improvements – 1% to 10% straight line
• Library Reference Collection – 15% diminishing value
• Plant and Equipment:
• Computing Equipment – 20% straight line
• Motor Vehicles – 15% straight line
• Other Plant and Equipment – 10% straight line

Leased assets and leasehold improvements are depreciated over either the unexpired period of the lease, or the useful lives of the assets or improvements, whichever is the shorter. Where there is reasonable certainty that the Company will obtain ownership of a leased asset by the end of the lease term, the leased asset should be depreciated over its useful life.

Depreciation for buildings and leasehold improvements will be calculated from the year after acquisition.

Depreciation for all other property, plant and equipment will be calculated from the month after acquisition. Depreciation is taken up until the item is fully depreciated, or until the month of retirement, whichever is the earliest.

AASB 116 Property, Plant & Equipment requires that the residual value, useful life and depreciation method of an asset be reviewed at least at the end of each annual reporting period. If expectations differ from previous estimates (i.e. expectations with respect to the depreciable amount, useful life or pattern of consumption of the asset) the consequential change in the rate of depreciation is to be accounted for as a change in accounting estimate.

Corporate Finance undertake an annual review of the useful lives and residual values for each asset class at reporting date.

Valuations

Acquisition at other than fair value

Assets acquired at no cost or for a nominal consideration, such as assets donated to our company, must be recognised at fair value as at the date of acquisition.

The objective of valuing these assets is to report on the value of economic benefits embodied in the asset.

Our company’s view is that fair value is the most relevant measurement attribute for assets. Purchase price is the most common basis for determining “fair value”.

All organisational units who manage these assets are responsible for ensuring that all assets are listed and assigned a value on the Asset Register.

Assets withdrawn permanently from use

An asset is withdrawn permanently from use when it has not been used for 12 months or more, has a carrying amount material to the relevant asset class and there are no plans to reinstate the asset to use.

An asset withdrawn permanently from use should be valued at selling price or scrap value.

The valuation of an asset held at fair value withdrawn permanently from use should be dealt with as an impairment.

Revaluations

Non-current assets measured at fair value are revalued at intervals of no greater than four years by appraisals undertaken by an independent professional valuer or internal expert. However, if the nature of the assets is such or an event causes a material movement in the value of the asset or class thereof, revaluations may be performed more frequently.

The Non-Current Asset Policies for the Public Sector require that interim revaluations of assets measured at fair value be performed on an annual basis, except in the year in which a full revaluation has been carried out. These interim revaluations are to be carried out using an appropriate and relevant revaluation index as determined by an appointed valuer, where practicable.

Interim revaluations are only applied when there is a material movement in the index.

Assets are not revalued in the year of acquisition on the basis that they are purchased or constructed at fair value.

In summary, the asset values are recorded as follows:

• Land – Fair value
• Buildings – Fair value
• Infrastructure – Fair value
• Land Improvements – Fair value
• Plant and Equipment – Cost
• Work In Progress – Cost
• Leasehold Improvements – Cost

In the case of land, buildings, infrastructure and land improvements, the recorded valuation is based on the gross current value assessed at current market value, or where no depth of market can be established, at replacement cost.

All revaluations need to be co-ordinated by Corporate Finance in accordance with the Non-

Current Asset Policies. However, carrying out this task is the responsibility of the responsible officer within the organisational unit. Upon receiving such a request, the Head of the organisational unit will nominate a valuer who should be a person with appropriate professional qualifications. The Chief Financial Officer will be advised of the name and qualifications of the valuer prior to the commencement of the valuation. After completion of the valuation, a copy of the valuation report signed and dated by the valuer will be submitted to the Chief Financial Officer.

Comprehensive valuation procedures are available. To obtain a copy contact the Assets management system.

On revaluation, accumulated depreciation is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount.

Any revaluation surplus is credited to a revaluation reserve included in the equity section of the Statement of Financial Position unless it reverses a revaluation decrease of the same class of asset previously recognised in profit or loss.

Any revaluation deficit is recognised in profit or loss unless it directly offsets a previous surplus from the same class of asset in the revaluation reserve and a positive balance exists in the revaluation reserve.

Stocktake

Our company, under State Government legislation, is required to verify the existence of all assets held by our company on a regular basis.

Assets refers to all items of property, plant and equipment covered under this policy; inventories; and portable and attractive items.

Our company has mandated a practice of undertaking physical stocktakes of assets on a biennial cycle. Work in progress, land, buildings, infrastructure and land improvement assets, and the library collections, are not included as part of the biennial stocktake.

Refer Inventories policy regarding the stocktake of inventories.

All Heads of organisational units are responsible for ensuring that this stocktake is performed by their unit.

The stocktake provides an opportunity to review asset holdings, and identify any obsolete or unused assets not already disposed of during the year.

All organisational units are notified biennially by Corporate Finance of the need to undertake a stocktake.

Corporate Finance are responsible for the co-ordination of the biennial stocktake. This includes document preparation, monitoring of compliance and analysing stocktake results.

Each asset listed is to be physically sighted with the exception of assets that are detected remotely over the network using asset verification software. Assets that have logged on to the network in the two months preceding the organisational unit’s stocktake are considered to be sighted. All assets sighted are to be noted. Stocktake certificates are to be signed and dated by the persons performing the stocktake.

A consistent approach should be maintained in regards to the biennial stocktake, and where practical, should be conducted by two or more nominated responsible officers, at least one of whom does not control or maintain the organisational unit Asset Register.

Assets that are unable to be located after a thorough investigation are considered to be missing and will be removed from the Asset Register.

After completion of the stocktake, the stocktake certificate must be authorised by the Head of the relevant organisational unit and forwarded to the Assets Unit.

Comprehensive stocktake procedures are available. To obtain a copy contact the Assets Unit.

Held for Sale

Non-current assets should be classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use in accordance with AASB5 Non-current Assets Held for Sale and Discontinued Operations.

In order to be classified as held for sale, an asset must be available for immediate sale in its present condition and the sale must be highly probable and expected to occur within one year.

An asset classified as held for sale should be measured at the lower of its carrying amount and fair value less costs to sell.

An asset ceases to be classified as held for sale if it no longer meets the criteria to be classified as held for sale. The asset should then be measured at the lower of its carrying amount before it was classified as held for sale, adjusted for any depreciation, amortisation or revaluations that would have been recognised had the asset not been classified as held for sale, and its recoverable amount at the date of the decision not to sell.

Derecognition

The carrying amount of an item of property, plant and equipment is derecognised upon disposal, or when no future economic benefits are expected from the continued use or disposal of the asset.

When an asset is sold and its selling price varies from the carrying amount, a gain or loss occurs which must be recognised in profit or loss.

If an asset is scrapped for no consideration before it is fully depreciated, the carrying amount of the asset represents a loss on disposal that must be expensed.