Accounting Policy

Cash is recognised at its nominal amount. Cash and cash equivalents include:

1. cash on hand; and
2. demand deposits in bank accounts with an original maturity of 12 months or less that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

Accounting Policy

Investments are expected to be recovered in more than 12 months.

At 30 June 2019 ARENA held 44,190,937 (2018: 43,094,784) fully paid “A” class units in the Renewable Energy Venture Capital (REVC) Fund Commonwealth Participation Trust (Trust).

The Trust is an investor pursuant to the REVC Co-Investment Arrangement. The principal activity of the REVC Co- Investment Arrangement, which is independently managed, is investing in early stage technology companies consistent with governing documents, including the Co-Investment Deed signed in 2011.

The investments of the REVC Co-Investment Arrangement comprise traded debt, equity and unlisted equity investments; these are valued in accordance with the guidelines published by the Australian and Venture Capital Association Limited (AVCAL).

The valuation is assessed to be materially consistent with AASB 13 Fair Value Measurement as the AVCAL methodology adopts market-based and observable inputs to the maximum extent possible in arriving at the values for the investments shown.

The REVC Co-Investment Arrangement recognises investments on the date it becomes party to the underlying contractual agreement and recognises any changes in value from this date. The value of ARENA’s investment at 30 June 2019 is based on annual audited financial statements of the REVC Co-Investment Arrangement at that reporting date.

2.2: Reconciliation of the Opening and Closing Balances of Property, Plant and Equipment and Intangibles

Accounting Policy

Acquisition of 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.

Leasehold Improvements

Leasehold improvements are carried at fair value.

Plant and Equipment

Plant and equipment are valued at cost in accordance with the FRR.

Intangibles

ARENA's intangibles comprise internally developed software for internal use. 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 ARENA's software is 3-10 years (2018: 3-10 years ).

Impairment

All assets are assessed for impairment at the end of each reporting period. When 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.

Revaluations

Following initial recognition at cost, all asset classes except for Intangibles 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 reversed a previous revaluation increment for that class. Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to revalued amount.

Depreciation

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

Leasehold improvements are depreciated over the lease term.

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.