Territory Stories

2013/14 City of Darwin annual report

Details:

Title

2013/14 City of Darwin annual report

Other title

City of Darwin annual report 2013/14

Creator

City of Darwin

Collection

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

Date

2014-11-26

Notes

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

Language

English

Subject

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

Publisher name

City of Darwin

Place of publication

Darwin

Series

City of Darwin annual report; Annual Report

Volume

2013/14

File type

application/pdf

Use

Copyright

Copyright owner

City of Darwin

License

https://www.legislation.gov.au/Details/C2019C00042

Parent handle

https://hdl.handle.net/10070/817299

Citation address

https://hdl.handle.net/10070/817300

Page content

CITY OF DARWIN Annual Report 2013/14 CITY OF DARWIN Annual Report 2013/14 152 153 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 CONTINUED (1.j) Investments and Other Financial Assets Council (in accordance with AASB 139) classifies each of its investments into one of the following categories for measurement purposes: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. Each classification depends on the purpose/intention for which the investment was acquired & at the time it was acquired. Management determines each Investment classification at the time of initial recognition and re- evaluates this designation at each reporting date. (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets that are held for trading. A financial asset is classified in the held for trading category if it is acquired principally for the purpose of selling in the short term. Assets in this category are primarily classified as current assets as they are primarily held for trading and are expected to be realised within 12 months of the balance sheet date. (ii) loans and receivables Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Council provides money, goods or services directly to a debtor with no intention (or in some cases ability) of selling the resulting receivable. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classified as non- current assets. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Councils management has the positive intention and ability to hold to maturity. In contrast to the Loans & Receivables classification, these investments are generally quoted in an active market. Held-to-maturity financial assets are included in non- current assets, except for those with maturities less than 12 months from the reporting date, which are classified as current assets. (iv) available-for-sale financial assets Available-for-sale financial assets are non- derivatives that are either designated in this category or not classified in any of the other categories. Investments must be designated as available-for- sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term. Accordingly, this classification can include all types of financial assets that could otherwise be classified in one of the other investment categories. They are generally included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date or the term to maturity from the reporting date is less than 12 months. Financial assets reclassification Council may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if the financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be reclassified out of the held-for- trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. Council may also choose to reclassify financial assets that would meet the definition of loans and receivables out of the held-for-trading or available- for-sale categories if it has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification. Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest rates for financial assets reclassified to loans and receivables and held-to- maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively. Note 1. Summary of Significant Accounting Policies CONTINUED General accounting & measurement of Financial Instruments: (i) Initial recognition Investments are initially recognised (and measured) at fair value, plus in the case of investments not at fair value through profit or loss, directly attributable transactions costs. Purchases and sales of investments are recognised on tradedate - the date on which the Council commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Council has transferred substantially all the risks and rewards of ownership. (ii) subsequent measurement Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the financial assets classified as fair value through profit or loss category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non monetary securities classified as availablefor-sale are recognised in equity in the available-for-sale investments revaluation reserve. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities. Impairment Council assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is impaired. If there is evidence of impairment for any of Councils financial assets carried at amortised cost, the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial assets original effective interest rate. The loss is recognised in the income statement. (1.k) Receivables Trade receivables are recognised at the amounts due at the time of sale or service delivery i.e. the agreed purchase price / contract price. Settlement of these amounts is required within 30 days from invoice date. The collectability of receivables is assessed periodically and if there is objective evidence that Council will not be able to collect all amounts due, the carrying amount is reduced for impairment.The loss is recognised in finance costs. The amount of the impairment is the difference between the assets carrying amount and the present value of the estimated cash flows discounted at the effective interest rate. All known bad debts were written-off at 30 June. Subsequent recoveries of amounts previously written off in the same period are recognised as finance costs in the Statement of Comprehensive Income. If an amount is recovered in a subsequent period it is recognised as revenue. Because Council is empowered under the provisions of the Local Government Act to sell an owners property to recover outstanding rate debts, Council does not impair any rate receivables. Loans and advances are recognised in the same way as other receivables. (1.l) Inventories Stores and raw materials are valued at the lower of cost and net realisable value and include, where applicable, direct material, direct labour and an appropriate portion of variable and fixed overheads. Costs are assigned on the basis of weighted average cost. Inventories held for distribution are: - goods to be supplied at no or nominal, charge, and - goods to be used for the provision of services at no or nominal charge. These goods are valued at cost, adjusted, when applicable, for any loss of service potential. Land acquired by Council with the intention of reselling it (with or without further development) is classified as inventory. This land is valued at the lower of cost and net realisable value. As an inventory item, this land held for resale is treated as a current asset. Proceeds from the sale of this land will be recognised as sales revenue on the signing of a valid unconditional contract of sale. There is no such land held by Council at balance date. (1.m) Other Financial Assets Other financial assets are recognised at cost. < >


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