National Consumer Tribunal Annual Report 2011/12 National Consumer Tribunal 2011-12 | Page 86

Annual Financial Statements
ACCOUNTING POLICIES
for the year ended 31 March 2011
1.8 Leasing (continued)
Finance leases
Assets held under finance leases and the corresponding liability is recognised at their
present value of the minimum lease payments at the date of acquisition. The corresponding
liability to the lessor is included in the statement of financial position as a finance lease
obligation. Finance costs, which represent the difference between the total leasing
commitments and the estimated present value of the assets acquired, are charged to the
statement of financial performance over the term of the relevant lease so as to produce
a constant periodic rate of interest on the remaining balance of the obligations for each
accounting period.
1.9 Government grants
Government grants are recognised when it is probable that future economic benefits will
flow to the National Consumer Tribunal and when the amount of the grant can be measured
reliably. Government grants are recognised as revenue to the extent that there is no further
obligation arising from the receipt of the transfer payment. Grants are measured at the fair
value of the transfer payment received.
1.10 Employee benefits
The cost of short-term employee benefits (those payable within 12 months after the service
is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary
benefits such as medical care), are recognised in the period in which the service is rendered
and are not discounted. The expected cost of compensated absences is recognised as an
expense as the employees render services that increase their entitlement or, in the case of
non-accumulating absences, when the absence occurs.
1.11 Borrowing costs
Borrowing costs are recog nised as an expense in the period in which they are incurred.
1.12 Property, plant and equipment
Items of property, plant and equipment are initially recognised as assets on acquisition date
and are initially recorded at cost. The cost of an item of property, plant and equipment is the
purchase price and other costs attributable to bring the asset to the location and condition
necessary for it to be capable of operating in the manner intended by the municipality.
Trade discounts and rebates are deducted in arriving at the cost. The cost also includes
the necessary costs of dismantling and removing the asset and restoring the site on which
it is located.
Property, plant and equipment are stated at historical cost less accumulated depreciation
and any impairment losses. The cost of an item of property, plant and equipment is
recognised as an asset when:
- -
- -
it is probable that future economic benefits or service potential associated with the item
will flow to the entity; and
the cost of fair value of the item can be measured reliably.
The National Consumer Tribunal assesses the useful life and residual values of property,
plant and equipment annually. The useful lives and residual values are estimated on an
annual basis at each year-end, with the effect of any changes in estimate accounted for on
a prospective basis.
Annual Report 2011
page 84 | national consumer tribunal