Page 78 - BWA Annual Report 2020 W

WESTERN AUSTRALIAN BASKETBALL FEDERATION INC.
NOTES TO THE FINANCIAL STATEMENTS For the Year Ended 31 December 2020
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Association and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Depreciation
The depreciation amount of all fixed assets including building and capitalised lease assets, and excluding motor vehicles, is depreciated in a straight-line basis over their lives to the commencing from the time the asset is held ready for use. Motor vehicles are depreciated on a reducing balance method at 25% a year.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at each balance date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses and included in the income statement. When revalued assets are sold, amounts included in the revaluation relating to that asset are transferred to retained earnings.
b. Leases
At inception of a contract, the Association assesses whether a lease exists i.e. does the contract convey the right to control the use of an identified asset for a period of time in exchange for consideration.
Right-of-use asset
At the lease commencement, the Association recognises a right-of-use asset and associated lease liability for the lease term. The lease term includes extension periods where the Association believes it is reasonably certain that the option will be exercised.
The right-of-use asset is measured using the cost model where cost on initial recognition comprises the lease liability, initial direct costs, prepaid lease payments, estimated cost of removal and restoration less any lease incentives received.
The right-of-use asset is depreciated over the lease term on a straight line basis and assessed for impairment in accordance with the impairment of assets accounting policy.
Lease liability
The lease liability is initially measured at the present value of the remaining lease payments at the commencement of the lease. The discount rate is the rate implicit in the lease, however where this cannot be readily determined then the Association's incremental borrowing rate is used.
71 | BWA ANNUAL REPORT 2020