Annual Report 2018-19

The commission controls property plant and equipment that are utilised in fulfilling its objectives and conducting its activities. They represent the key resources that have been entrusted to the commission to be utilised for delivery of services.

5.1. Property, plant and equipment: 5.1.1. Depreciation and amortisation 5.1.2. Reconciliation of movements in carrying values of property, plant and equipment

5.1. Property, plant and equipment

	Gross carrying amount		Accumulated Depreciation		Net carrying amount
	2019	2018	2019	2018	2019	2018
	$	$	$	$	$	$
Leasehold improvements	106,470	106,470	(49,686)	(28,393)	56,784	78,077
Office and computer equipment at fair value	23,140	23,140	(23,140)	(22,308)	-	832
Motor vehicle under finance lease	37,865	101,506	(21,879)	(43,141)	15,986	58,365
Construction in Progress – Building	139,716	-			139,716	-
Construction in Progress – Plant & Equipment	37,902	13,059			37,902	13,059
Net carrying amount	345,093	244,175	(94,705)	(93,842)	250,388	150,333

Initial recognition

Items of property, plant and equipment, are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominal cost, the cost is its fair value at the date of acquisition.

The initial cost for non-financial physical assets under a finance lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.

Subsequent measurement

Property, plant and equipment are subsequently measured at fair value less accumulated depreciation and impairment. Fair value is determined with regard to the asset’s highest and best use (considering legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset).

Leasehold improvements

The cost of leasehold improvements is capitalised as an asset and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.

5.1.1. Depreciation and amortisation

	2019	2018
Charge for the period	$	$
Leasehold improvements	21,294	25,120
Office and computer equipment	832	3,328
Motor vehicles under finance lease	13,248	20,251
Intangible assets	-	139,137
Total depreciation and amortisation	35,374	187,836

All plant and equipment and intangible produced assets that have finite useful lives are depreciated. Depreciation is calculated on a straight line basis at rates that allocate the asset’s value, less any estimated residual value, over its expected useful life. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method.

Intangible produced assets with finite useful lives are depreciated as an expense from transactions on a straightline basis over the asset’s useful life. Depreciation begins when the asset is available for use, that is, when it is in the location and condition necessary for it to be capable of operating in the manner intended by management.

Typical estimated useful lives applicable for the years ended 30 June 2019 and 30 June 2018 are as follows:

Leasehold improvements	4-10 years
Office and computer equipment	3-10 years
Motor vehicles under finance lease	2-3 years
Capitalised software development	3-7 years

The estimated useful lives, residual values and depreciation method are reviewed at least annually.

Impairment of non-financial assets

All non-financial physical assets and intangible assets, except non-financial physical assets held for sale, are assessed annually for indications of impairment. If there is an indication of impairment, the assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is written off to other economic flows except to the extent that the write-down can be debited to an asset revaluation surplus amount applicable to that class of asset.

If there is an indication that there has been a reversal in the estimate of an asset’s recoverable amount since the last impairment loss was recognised, the carrying amount shall be increased to its recoverable amount. The impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised in prior years.

5.1.2. Reconciliation of movements in carrying values of property, plant and equipment

	Leasehold improvements	Office and computer equipment	Motor vehicles under finance lease	Construction in Progress – Building	Construction in Progress – Plant & Equipment	Total
	$	$	$	$	$	$
2019
Carrying amount at start of year	78,077	832	58,365		13,059	150,333
Additions	-		29,601	139,716	24,843	194,160
Disposals			(31,650)			(31,650)
Depreciation expense	(21,293)	(832)	(13,248)			(35,373)
Transfers to Held for Sale	-	-	(27,082)			(27,082)
Carrying amount at end of year	56,784	0	15,986	139,716	37,902	250,388
2018
Carrying amount at start of year	45,816	4,160	78,616		-	128,592
Additions	57,381		-	-	13,059	70,440
Disposals			-			-
Depreciation expense	(25,120)	(3,328)	(20,251)			(48,699)
Carrying amount at end of year	78,077	832	58,365	-	13,059	150,333