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Notes to the Financial Statements
THE ROYAL COLLEGE OF PATHOLOGISTS OF AUSTRALASIA
ABN 52 000 173 231
NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018
1. Significant Accounting Policies (continued) (b) Property Plant and Equipment (continued)
In 2013 an exception was made to this policy for the cost of renovations to the kitchen in Durham Hall. The renovations are estimated to have a useful life of 10 years and are being depreciated on a straight line basis.
Plant and Equipment
Plant and equipment is measured on a cost basis less accumulated depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by Directors to ensure that it is not in excess of the recoverable amount from those assets. The recoverable amount is assessed on the basis of the expected net cash flows, which will be received from the asset’s employment and subsequent disposal. The expected net cash flows have not been discounted to present values in determining the recoverable amount.
The Directors of the College do not consider the wall hangings, portraits, presidential medallion and chain, historical books, Maori carved panel and the cedar table to be depreciating assets (that is they are capital appreciating assets) and as such no depreciation has been charged to them. The carrying value of these items is at cost.
Depreciation is charged on straight line basis and the rates used for each class of assets are as follows:
Class of fixed asset
Owned plant and equipment Leased plant and equipment
Web Site Development
Depreciation rate
5 – 40% 20%
The costs of developing the College’s web site are recognised as asset and are depreciated over the useful life of the asset. The useful life of the web site is limited due to rapid technological changes and generally would be expected to have a short useful life. Accordingly, a useful life of four years has been adopted for this asset.
(c) Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not legal ownership, are transferred to the College and classified as finance leases. Finance leases are capitalised in recording an asset and a liability equal to the present value of the minimum lease payments, including any guaranteed residual values.
Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the College will obtain ownership of the asset or over the term of the lease. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Lease payments under operating leases, where substantially all the risks and benefits remain with the lessor, are charged as an expense through the Statement of Profit or Loss and Other Comprehensive Income on a straight line basis.
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ANNUAL REPORT • 2017 - 2018