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Note 2 - Financial Position

Australian Institute of Aboriginal and Torres Strait Islander Studies

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the period ended 30 June 2019

2019

2018

$'000

$'000

Financial Position

Note 2.1: Financial Assets

Note 2.1A: Cash and cash equivalents

Cash on hand or on deposit

6,258

10,122

Cash on call deposit

58

57

Total cash and cash equivalents

6,316

10,179

Note 2.1B: Trade and other receivables

Goods and services receivables

Goods and services

217

320

Total goods and services receivables

217

320

Other receivables

GST receivable from the Australian Taxation Office

501

497

Interest receivable

70

53

Total other receivables

571

550

Total trade and other receivables (gross)

788

870

Less impairment loss allowance

(9)

(6)

Total trade and other receivables (net)

779

864

Accounting Policy

Financial assets

Trade receivables, loans and other receivables that are held for the purpose of collecting contractual cash flows where the cash flows are solely payments of principal and interest, that are not provided below market interest rates, are subsequently measured at amortised cost using the effective interest method adjusted for any loss allowance.

Australian Institute of Aboriginal and Torres Strait Islander Studies NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the period ended 30 June 2019

Note 2.2 : Non Financial Assets

Note 2.2A: Reconciliation of the opening and closing balances of property, plant and equipment

Buildings

Plant and equipment

Heritage and

Cultural1

Computer software2

Total

$’000

$’000

$’000

$’000

$’000

As at 1 July 2018

Gross book value

11,865

3,812

11,350

270

27,297

Accumulated depreciation, amortisation and impairment

(390)

(1,620)

(70)

(181)

(2,261)

Total as at 1 July 2018

11,475

2,192

11,280

89

25,036

Work in progress reclassified from non-financial assets Additions:

156

4

-

-

160

Purchase 1,006

1,298

51

-

2,355

Revaluations and impairments recognised in other comprehensive income

1,447

230

148

51

1,876

Depreciation and amortisation

(195)

(783)

(34)

(65)

(1,077)

Reclassifications

216

(216)

-

-

-

Writedowns and impairments recognised in net cost of services

-

(7)

-

-

(7)

Total as at 30 June 2019

14,105

2,718

11,445

75

28,343

Total as of 30 June 2019 represented by:

Gross book value

13,707

2,622

11,445

75

27,849

Work in progress

398

96

-

-

494

Accumulated depreciation, amortisation and impairment

-

-

-

-

-

Total as at 30 June 2019

14,105

2,718

11,445

75

28,343

  1. Buildings and plant and equipment that met the definition of a heritage and cultural item are disclosed in the heritage and cultural asset class.
  2. The carrying amount of computer software included $0.013m purchased software and $0.062m internally generated software.
  3. No property, plant and equipment and intangibles are expected to be sold or disposed of within the next 12 months.
  4. The Institute's building may not be disposed of without prior Ministerial approval.
  5. Revaluations were conducted in accordance with the revaluation policy stated at Accounting Policy - non financial assets An independent valuer conducted the revaluations as at 30 June 2019.

Australian Institute of Aboriginal and Torres Strait Islander Studies

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the period ended 30 June 2019

Accounting Policy - non financial assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at their fair value at the date of acquisition, unless acquired as a consequence of restructuring of administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at the amounts at which they were recognised in the transferor’s accounts immediately prior to the restructuring.

Asset Recognition Threshold

Asset purchases are recognised initially at cost in the statement of financial position, except for purchases costing less than

$2,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).

Desktop and laptop computers, heritage and cultural assets are recognised as assets regardless of cost.

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located.

Revaluations

Following initial recognition at cost, property, plant and equipment are carried at fair value less subsequent accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient frequency to ensure that the carrying amounts of assets did not differ materially from the assets’ fair values as at the reporting date. The regularity of independent valuations depended upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reversed a previous revaluation decrement of the same asset class that was previously recognised in the surplus/deficit. Revaluation decrements for a class of assets are recognised directly in the surplus/deficit except to the extent that they reverse a previous revaluation increment for that class.

Professional judgement has been applied to determine the fair value from observable market evidence.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Assets are valued on a recurring basis.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Institute using, in all cases, the straight-line method of depreciation.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable assets are as follows:

2019

years

2018

years

Buildings

15 to 70

40 to 70

Plant and equipment

1 to 20

1 to 20

Heritage and cultural

50 to 99

50 to 99

The Institute has items of heritage and cultural assets that have unlimited useful lives and are not depreciated.

Impairment

All assets were assessed for impairment at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Institute were deprived of the asset, the recoverable amounts are expected to be materially the same as fair value.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Heritage and Cultural Assets

The Institute collects and preserves heritage and cultural assets. The collection includes moving images, photos, art, artefacts and manuscripts.

The Institute has a Digital Preservation Policy which ensures the long-term digital preservation of collection assets held in the Collection. The Institute digitally preserves items identified on the prioritisation schedule within the Collection in adherence to cultural protocols, intellectual property rights and using internationally recognised standards.

Intangibles

The Institute's intangibles comprise internally developed computer software for internal use and purchased computer software. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Institute's software are 3 to 5 years.

Impairment

All assets were assessed for impairment at 30 June 2019. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. Value in use is the present value of the future cash flows expected to be derived from the asset. Where the future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash flows, and the asset would be replaced if the Institute were deprived of the asset, the recoverable amounts are expected to be materially the same as fair value.

Derecognition

An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Heritage and Cultural Assets

The Institute collects and preserves heritage and cultural assets. The collection includes moving images, photos, art, artefacts and manuscripts.

The Institute has a Digital Preservation Policy which ensures the long-term digital preservation of collection assets held in the Collection. The Institute digitally preserves items identified on the prioritisation schedule within the Collection in adherence to cultural protocols, intellectual property rights and using internationally recognised standards.

Intangibles

The Institute's intangibles comprise internally developed computer software for internal use and purchased computer software. These assets are carried at cost less accumulated amortisation and accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Institute's software are 3 to 5 years.

Australian Institute of Aboriginal and Torres Strait Islander Studies

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

for the period ended 30 June 2019

2019

2018

$'000

$'000

Note 2.2B: Inventories

Inventories held for sale

Finished goods

283

300

Provision for obsolete inventory

(94)

(94)

Total inventories

189

206

Accounting Policy

Inventories held for sale are valued at the lower of cost and net realisable value.

Finished goods and work-in-progress include the cost of direct materials and labour plus attributable costs that can be allocated on a reasonable basis.

During 2019, $176,630 of inventory held for sale was recognised as an expense (2018: $229,624).

Note 2.2C: Other non-financial assets

Prepayments

652

366

Work in progress-non-financial assets

0

160

Total other non-financial assets

652

526

Note 2.3: Payables

Note 2.3A: Other payables

Salaries and wages

76

110

Superannuation

13

12

Unearned Income

12,692

10,221

Other

11

0

Total other payables

12,792

10,343