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Annual Report 2009 Charles Darwin University Financial Statements year ending 31 December 2009



Annual Report 2009 Charles Darwin University Financial Statements year ending 31 December 2009

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Tabled paper 917


Tabled papers for 11th Assembly 2008 - 2012; Tabled papers; ParliamentNT




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CDU 2009 FINANCIAL STATEMENTS 19 CHARLES DARWIN UNIVERSITY AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2009 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued (t) Borrowings Borrowings are initially recognised at fair value, net of transactions costs incurred. Borrowings are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrwings using the effective interest method. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in other income or other expenses. (s) Leases Assets, which are acquired under leases deemed to be finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to the ownership of the leased assets, are capitalised at the lease's inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset's useful life and the lease term (using the straight-line method). Effective interest is charged to the income statement over the period of the borrowings and recognises any difference between the fair value of borrowings at inception and the redemption amount. As it is the intention of the University to hold its borrowings for their full term, the accumulated effective interest charged to the income statement will, over time, exactly offset the accumulated fair value gain on borrowings. Borrowing costs, which include interest calculated using the effective interest method and administration fees, are expensed in the period in which they arise. Costs that are not settled in the period in which they arise are added to the carrying amount of the borrowing. Borrowings are classified as current liabilites unless the University has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Leases in which significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on straight line basis over the lease term. Lease expenditure relating to leases deemed to be "operating leases" is expensed as incurred. (u) Joint Ventures Interests in joint venture operations where it is identified that the University has significant control, are reported in the financial statements by including the economic entity's share of assets, liabilities, revenues and expenses in their respective classification categories. Details of joint ventures are set out in note 35. (v) Taxation The Charles Darwin University is a public authority within the meaning of Section 50-25 of the Income Tax Assessment Act and its income is exempt under the provisions of that Act. Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: (i) Where the amount of GST incurred is not recoverable from the Australian Tax Office, the GST is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or (ii) For receivables and payables which are recognised inclusive of GST. Charles Darwin University Financial Statements 2009

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