KU Financial Report
3. Summary of Accounting Policies (continued)
Assets held under finance leases are initially recognised as assets of the company at their fair value at the inception
of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to
the lessor is included in the Statement of Financial Position as a finance lease obligation. Lease payments are
apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss,
unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the
Company’s general policy on borrowing costs.
Lease incentives
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as
a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straightline basis, except where another systematic basis is more representative of the time pattern in which economic
benefits from the leased asset are consumed.
h) Revenue
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of discounts, refunds and amounts collected on behalf of third parties. The Company recognises revenue
when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to
the Company and specific criteria have been met for each of the Company’s activities as described below.
Fundraising
Fundraising is recorded when the income is received or receivable.
Rendering of services
Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract.
Government funding - operational
Government funding agreements are contracted agreements with the Government to provide a variety of early
childhood education and care programs in the community. They are received in the form of transfers of resources
to the Company in return for past or future compliance with certain conditions relating to the operating activities
of the Company. Non-reciprocal government funding monies, other than monies held in trust, are credited to
income when received in accordance with AASB 1004 “Contributions”. Other service revenues from government
agencies are recognised upon delivery of services in accordance with AASB 118 “Revenue”.
Government funding - capital
Funds are received from government departments in accordance with contracts to undertake capital works
programs on behalf of the department. In accordance with AASB 1004 “Contributions”, this income is recognised
upfront once control of the funds or the commitment to receive funds has been satisfied.
Government Brokered Programs
Funds are received from Government Brokered Programs by KU Children’s Services for the allocation to recipients
who provide a variety of early childhood education and care programs in the community. The funds received and
allocated are recognised in the Statement of Profit or Loss and Other Comprehensive Income in accordance with
AASB 118 “Revenue”. Cash flows are included in the Statement of Cash Flows on a gross basis.
Unit trust distributions and interest revenue
Unit trust distributions from investments are recognised when the unit holder’s right to receive payment has
been established.
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life
of the financial assets to that asset’s net carrying amount.
120th Annual Report 2015