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2013/14 City of Darwin annual report



2013/14 City of Darwin annual report

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City of Darwin annual report 2013/14


City of Darwin


E-Publications; E-Books; PublicationNT; City of Darwin annual report; Annual Report




Made available by via Publications (Legal Deposit) Act 2004 (NT)




Darwin (N.T.); Council; Periodical; Annual report

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City of Darwin

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City of Darwin annual report; Annual Report



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City of Darwin



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CITY OF DARWIN Annual Report 2013/14 CITY OF DARWIN Annual Report 2013/14 150 151 Notes to the Financial Statements for the year ended 30 June 2014 Notes to the Financial Statements for the year ended 30 June 2014 Note 1. Summary of Significant Accounting Policies The principal accounting policies adopted by Council in the preparation of these financial statements are set out below in order to assist in its general understanding. Under Australian Accounting Standards accounting policies are defined as those specific principles, bases, conventions, rules and practices applied by a reporting entity (in this case City of Darwin) in preparing and presenting its financial statements. (1.a) Basis of Preparation These general purpose financial statements for the period 1 July 2013 to 30 June 2014 have been prepared in accordance with Australian Accounting Standards. They also comply with the requirements of the Local Government Act and Regulations. These financial statements have been prepared under the historical cost convention except for the revaluation of certain non-current assets. (1.b) Basis of Consolidation The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the City of Darwin as at 30 June 2014 and the results of all controlled entities for the year then ended. The Council and its controlled entities together form the economic entity which is referred to in these financial statements as the consolidated entity. In the process of reporting the Council as a consolidated entity, all transactions with entities controlled by the Council have been eliminated. The controlled entity, the Darwin Entertainment Centre, is accounted for at cost. Information on the controlled entity is included in Note (1.aa) and Note 28. (1.c) Constitution The City of Darwin is a body corporate of the Northern Territory, Australia, being constituted as a Local Government area by proclamation and is duly empowered by the Local Government Act of the Northern Territory. (1.d) Date of Authorisation The financial statements were authorised for issue on the date they were submitted to the Risk Management and Audit Committee for endorsement. This is also the date the Chief Executive Officers statement is signed. (1.e) Currency The Council uses the Australian dollar as its functional currency and its presentation currency. (1.f) Critical accounting judgements and key sources of estimation uncertainty In the application of Councils accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and ongoing assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods as relevant. Judgements, estimates and assumptions that have a potential significant effect are outlined in the following financial statement notes: Valuation and depreciation of Property, Plant & Equipment - Note (1.o), Note 14 and Note 15 Impairment of Non-current Assets Note (1.p) Provisions - Note (1.t) and (1.v) and Note 18 Contingencies - Note 25. (1.g) Revenue Rates, levies, grants and other revenue are recognised as revenue on receipt of funds or earlier upon unconditional entitlement to the funds. rates and levies Where rate monies are received prior to the commencement of the rating year, the amount is disclosed as revenue received in advance. Otherwise rates are recognised at the commencement of rating period. Grants and subsidies Grants, subsidies and contributions that are non- reciprocal in nature are recognised as revenue in the year in which Council obtains control over them. An equivalent amount is placed in a reserve until the funds are expended. Where grants are received that are reciprocal in nature, revenue is recognised as the various performance obligations under the funding agreement are fulfilled. Note 1. Summary of Significant Accounting Policies CONTINUED non-cash contributions Non-cash contributions with a value in excess of the recognition thresholds as stated in Note (1.o) are recognised as revenue and as non-current assets. Non-cash contributions below the thresholds are recorded as revenue and expenses. Physical assets contributed to Council by developers in the form of road works, stormwater and park equipment are recognised as revenue when the development becomes on maintenance (i.e. the Council obtains control of the assets and becomes liable for any ongoing maintenance) and there is sufficient data in the form of drawings and plans to determine the approximate specifications and values of such assets. All non-cash contributions are recognised at the fair value of the contribution received on the date of acquisition cash contributions Developers also pay infrastructure charges for the construction of assets, such as roads and stormwater drainage. These infrastructure charges are not within the scope of AASB Interpretation 18 because there is no performance obligation associated with them. Consequently, the infrastructure charges are recognised as income when received. rental income Rental revenue from investment and other property is recognised as income on a periodic straight line basis over the lease term. Interest and dividends Interest received from term deposits is accrued over the term of the investment. No dividends were received during the reporting period. sales revenue Sale of goods is recognised when the significant risks and rewards of ownership are transferred to the buyer, generally when the customer has taken undisputed delivery of the goods. Fees and charges Fees and charges are recognised upon unconditional entitlement to the funds. Generally this is upon lodgement of the relevant applications or documents, issuing of the infringement notice or when the service is provided. (1.h) Financial Assets and Financial Liabilities Council recognises a financial asset or a financial liability in its Statement of Financial Position when, and only when, Council becomes a party to the contractual provisions of the instrument. City of Darwin has categorised and measured the financial assets and financial liabilities held at balance date as follows: Financial assets Cash and cash equivalents (Note 1.i) Receivables - measured at amortised cost (Note 1.k) Financial liabilities Payables - measured at amortised cost (Note 1.s) Borrowings - measured at amortised cost (Note 1.u) Financial assets and financial liabilities are presented separately from each other and offsetting has not been applied. The fair value of financial instruments is determined as follows: The fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities approximate their carrying amounts and are not disclosed separately. The fair value of borrowings, as disclosed in Note 17 to the accounts, is determined by reference to published price quotations in an active market and/or by reference to pricing models and valuation techniques. It reflects the value of the debt if the Council repaid it in full at balance date. As it is the intention of the Council to hold its borrowings for their full term, no adjustment provision is made in these accounts. The fair value of trade receivables approximates the amortised cost less any impairment. The fair value of payables approximates the amortised cost. City of Darwin does not recognise financial assets or financial liabilities at fair value in the Statement of Financial Position. All other disclosures relating to the measurement and financial risk management of financial instruments are included in Note 33. (1.i) Cash and Cash Equivalents Cash and cash equivalents includes cash on hand, all cash and cheques receipted but not banked at the year end, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. < >

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