Page 66 - Playhouse Annual Report 2021:22

Annual Financial Statements for the year ended 31 March 2022 Accounting Policies (continued)
1.6 Heritage assets
Heritage assets are assets that have a cultural, environmental, historical, natural, scientific, technological or artistic significance and are held
indefinitely for the benefit of present and future generations.
Heritage assets are recognised as an asset if (a) it is probable that future economic benefits or service potential association with the asset will flow to the entity, and (b) the cost or fair value of the asset can be measured reliably.
A heritage asset that qualifies for recognition as an asset shall be measured at its cost.
Where the heritage asset is acquired through a non-exchange transaction, its cost shall be measured at its fair value as at date of acquisition. After recognition as an asset, a class of heritage asset shall be carried at its cost less any accumulated impairment losses.
1.7 Inventories
Inventories are carried at the lower of cost and net realisable value. The cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition, and is determined using the first-in, first-out method. Obsolete, redundant and slow moving inventories are identified on a regular basis and are written down to their estimated net realizable values.
1.8 Financial instruments Measurement
Financial instruments are initially measured at cost, which includes transaction costs. Subsequent to initial recognition these instruments are measured as set out below:
Trade and other receivables
Trade and other receivables originated by The Playhouse Company are stated at cost less provision for doubtful debts. Receivables are written off when considered irrecoverable. Trade and other receivables and provision for doubtful debts are discounted using the effective interest rate where considered applicable.
Cash and cash equivalents
Cash and cash equivalents are measured at fair value.
Trade and other payables
Trade and other payables originated by The Playhouse Company are stated at cost. Trade and other payables are discounted using the effective interest rate where considered applicable.
Gains and losses on subsequent measurement
Gains and losses arising from a change in the fair value of financial instruments that are not part of a hedging relationship are included in net profit or loss in the period in which the change arises.
1.9 Retirement benefit plans
It is the policy of The Playhouse Company to provide retirement benefits for the employees. The Playhouse Company’s contributions in respect
of defined contribution plans and benefit plans are expensed as incurred.
1.10 Revenue from non-exchange transactions
Revenue from non-exchange transactions arises when an entity receives value from another entity without directly giving approximately equal value in exchange. An asset acquired through a non-exchange transaction shall initially be measured at its fair value as at the date of acquisition.
This revenue will be measured at the amount of increase in net assets recognised by the entity.
An inflow of resources from a non-exchange transaction recognised as an asset shall be recognised as revenue, except to the extent that a liability is recognised for the same inflow. As an entity satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it will reduce the carrying amount of the liability recognised as an amount equal to that reduction.
The Playhouse Company has entered into a lease agreement for the free use of certain land and buildings.
64 The Playhouse Company