KU Financial Report
3. Summary of Accounting Policies (continued)
Basis of preparation
The financial report has been prepared on the basis of historical cost, except for the revaluation of certain financial instruments. Cost
is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars. The
following significant accounting policies have been adopted in the preparation and presentation of the financial report:
a) Property, plant and equipment
Land and buildings, leasehold improvements, furniture and office equipment, motor vehicles and computers are stated at cost
less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the
item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the
amounts payable in the future to their present value as at the date of acquisition.
Depreciation is provided on furniture and office equipment, motor vehicles and computers, including freehold and leasehold
buildings but excluding land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset over
its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are
reviewed at the end of each annual reporting period.
The following estimated useful lives are used in the calculation of depreciation:
• Buildings: 40 years
• Buildings fixtures and fittings: 4-10 years
• Leasehold Improvements: lease term or 10 years
• Furniture and office equipment: 4-10 years
• Motor vehicles: 6-7 years
The Company reviews its estimate of the useful lives of leasehold improvements at each reporting date, based on the period over
which an asset is expected to be available for use by the Company. The useful life of leasehold improvements has been assessed
to equal the lease term, or 10 years where no lease term was applicable. Land is carried at cost and is not depreciated.
b) Intangible Assets
Intangible Assets comprise software assets. The estimated useful lives used to calculate amortisation are between 3-5 years.
c) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave and
rostered days off when it is probable that settlement will be required and they are capable of being measured reliably.
Liabilities recognised in respect of employee benefits expected to be settled within 12 months are measured using the
remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the
present value of the estimated future cash outflows to be made by the Company in respect of services provided by employees
up to reporting date.
The Company pays contributions to certain defined contribution plans. Contributions are recognised in profit or loss in the periods
during which services are rendered by employees.
121st Annual Report 2016