Externally restricted assets
There are no restrictions applicable to the above assets.
Notes
14
Current
2,221 15
10,547
208 44
208 44
10,473
Current
2018 2017
2018
8,317 8,311
2,142
2017
Notes Current Non-current Current Non-current
Attachment 2 Page 32
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018
The Hills Shire Council
Notes to the Financial Statements
for the year ended 30 June 2018
Note 8. Inventories and other assets
(continued)$ ’000
Other disclosures
Details for real estate development Residential
Total real estate for resale
(Valued at the lower of cost and net realisable value) Represented by:
Acquisition costs Development costs Total real estate for resale Movements:
Real estate assets at beginning of the year – Purchases and other costs
– Transfers in from (out to) Note 10 Total real estate for resale
Accounting policy
Raw materials and stores, work in progress and finished goods
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Costs are assigned to individual items of inventory on basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
Inventory held for distribution
Inventory held for distribution is held at cost, adjusted where applicable for any loss of service potential.
Land held for resale/capitalisation of borrowing costs
Land held for resale is stated at the lower of cost and net realisable value. Cost is assigned by specific identification and includes the cost of acquisition, and development and borrowing costs during development.
When development is completed borrowing costs and other holding charges are expensed as incurred.
Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if the expenditure on the acquisition and development of the land had not been made. Borrowing costs incurred while active development is interrupted for extended periods are recognised as expenses.
6
Current Current
8,311
8,311
8,317 –
5,469
8,311 92 8,317
8,311
8,311 8,311 8,317
8,311 8,317
– Notes
6
2,750
2018 2017
Attachment 2 Page 33
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018
The Hills Shire Council
Notes to the Financial Statements
for the year ended 30 June 2018
Note 9. Non-current assets classified as held for sale (and disposal groups)
$ ’000
Reconciliation of non-current assets
‘held for sale’
Opening balance - Additional Costs
Less: carrying value of assets/operations sold Closing balance of ‘held for sale’
non-current assets and operations
Accounting policy for non-current assets classified as held for sale
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets; assets arising from employee benefits; financial assets; and investment property that are carried at fair value.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of de-recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale.
–
– –
– –
135
2018 2017
– 2018
–
Disposal groups
(140,135) 140,000 –
– –
– 2017
Assets ‘held for sale’
Attachment 2 Page 34
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018 page 33
The Hills Shire Council Notes to the Financial Statements for the year ended 30 June 2018 Note 10(a). Infrastructure, property, plant and equipment Asset class At $ ’000 cost Capital work in progress15,480–15,4801,75721,433–––(1,644)–––37,026–37,026 Plant and equipment16,05110,3495,702–3,235(565)(2,447)–––––16,53810,6135,925 Office equipment829356473–105–(142)–––––934498436 Land: – Operational land116,358–116,358–––––––74,534–190,892–190,892 – Community land319,101–319,101–61,655––(18,895)–(30,673)––331,188–331,188 – Land under roads (pre 1/7/08)839,678–839,678–––––––––839,678–839,678 – Land under roads (post 30/6/08)88,164–88,164–1,265–––––––89,428–89,428 Infrastructure: – Buildings275,35837,432237,9262,587430–(3,971)–388–––278,76341,403237,360 – Roads1,016,49538,765977,73010,20034,244–(11,841)–218–––1,061,15650,6061,010,550 – Bulk earthworks (non-depreciable)110,440–110,440–––––––––110,440–110,440 – Stormwater drainage272,3959,085263,3101,24813,098–(1,454)–87–––286,82810,540276,288 Other assets: – Other66,86614,97251,8941,9598,008–(1,659)–951–––77,69916,54661,153 TOTAL INFRASTRUCTURE, PROPERTY, PLANT AND EQUIP. Renewals are defined as the replacement of existing assets (as opposed to the acquisition of new assets).
Gross carrying amount
Impairment loss / revaluation decrements (recognised in P/L)
Depreciation expense Revaluation decrements to equity (ARR) Revaluation increments to equity (ARR)
Net carrying amount Asset movements during the reporting period as at 30/6/2017 WIP transfersAdditions new assetsAdditions renewals
Carrying value of disposals
Accumulated depreciation and impairment
Gross carrying amount as at 30/6/2018 Net carrying amount
Accumulated depreciation and impairment 3,190,364(30,673)74,534–3,320,570130,2063,137,215110,9593,026,256(18,895)17,751(565)143,472(21,514)–
Attachment 2 Page 35
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018
The Hills Shire Council
Notes to the Financial Statements
for the year ended 30 June 2018
Note 10(a). Infrastructure, property, plant and equipment
(continued)Accounting policy for infrastructure, property, plant and equipment
Infrastructure, property, plant and equipment are held at fair value. Comprehensive valuations are performed at least 5 yearly, however the carrying amount of assets is assessed at each reporting date to confirm that it is not materially different from current fair value.
All items of infrastructure, property, plant and equipment are fully capitalised except for Office Furniture and Office Equipment where cost of acquisition is less than $5,000.
Increases in the carrying amounts arising on revaluation are credited to the asset revaluation reserve. To the extent that the increase reverses a decrease previously recognising profit or loss relating to that asset class, the increase is first recognised as profit or loss. Decreases that reverse previous increases of assets in the same class are first charged against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the class; all other decreases are charged to the Income Statement.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Council and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
Land is not depreciated. Depreciation on Council's infrastructure and property is calculated on consumption basis with the exception of plant and equipment assets which is on straight line method to allocate their cost, net of their residual values, over their estimated useful lives as follows:
Plant and equipment Years Other equipment Years
Office equipment > $5,000 5 Playground equipment 30
Office furniture > $5,000 5 Benches, seats etc. 15 to 80
Computer equipment > $5,000 5
Vehicles 4
Heavy plant/road making equipment 4 Other plant and equipment 4
Buildings Stormwater assets
Buildings 15 to 150 Drains 250
Pipes 100 to 250
Transportation assets Other infrastructure assets
Sealed roads: surface 35 to 150 Bulk earthworks Infinite
Sealed roads: structure 105 to 250 Other open space/recreational assets 15 to 80
Unsealed roads 150
Bridge: concrete 250
Bridge: other 120 to 230
Kerb, gutter and footpaths 100 to 250
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Income statement.
Attachment 2 Page 36
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018
The Hills Shire Council
Notes to the Financial Statements
for the year ended 30 June 2018
Note 10(a). Infrastructure, property, plant and equipment
(continued)Accounting policy for infrastructure, property, plant and equipment (continued) Land under roads
Land under roads is land under roadways and road reserves including land under footpaths, nature strips and median strips.
Council has elected to recognise land under roads acquired before 1 July 2008 in accordance with AASB 1051.
Land under roads acquired after 1 July 2008 is recognised in accordance with AASB 116 Property, Plant and Equipment.
Crown reserves
Crown Reserves under Council’s care and control are recognised as assets of the Council. While ownership of the reserves remains with the Crown, Council retains operational control of the reserves and is responsible for their maintenance and use in accordance with the specific purposes to which the reserves are dedicated.
Improvements on Crown Reserves are also recorded as assets, while maintenance costs incurred by Council and revenues relating to the reserves are recognised within Council’s Income Statement.
Rural Fire Service assets
Under section 119 of the Rural Fire Services Act 1997 (NSW),“all fire fighting equipment purchased or constructed wholly or from money to the credit of the Fund is to be vested in the council of the area for or on behalf of which the fire fighting equipment has been purchased or constructed”.
Council will continue to account for Rural Fire Services assets under its care and control as assets of Council.
Attachment 2 Page 37
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018
The Hills Shire Council
Notes to the Financial Statements
for the year ended 30 June 2018
Note 11. Investment property
$ ’000
(a) Investment property at fair value Investment property on hand
Reconciliation of annual movement:
Opening balance – Acquisitions
CLOSING BALANCE – INVESTMENT PROPERTY
(b) Valuation basis
The basis of valuation of investment property is fair value, being the amounts for which the properties could be exchanged between willing parties in arms length transaction, based on current prices in an active market for similar properties in the same location and condition and subject to similar leases.
(c) Contractual obligations at reporting date
Refer to Note 16 for disclosures relating to any capital and service obligations that have been contracted.
(d) Investment property income and expenditure – summary
Rental income from investment property:
– Minimum lease payments
Net revenue contribution from investment property plus:
Fair value movement for year
Total income attributable to investment property Accounting policy for investment property
Investment property, principally comprising freehold office buildings, is held for long-term rental yields and is not occupied by the Council. Changes in fair values are recorded in the income statement as part of other income.
Properties that are under construction for future use as investment property are regarded as investment property.
These are also carried at fair value unless the fair value cannot yet be reliably determined. Where that is the case, the property will be accounted for at cost until either the fair value becomes reliably determinable or construction is complete.
–
3,381
3,381 49,128 69,991
87,619
87,619
– 2017
20,863 17,628
3,197
69,991
3,197
69,991
3,197
3,381 2018
Council engages external, independent and qualified valuers to determine the fair value of Council's investment properties. Investments properties have not been revalued ast at 30 June 2018 as there has not been any material movement of prices in active markets. The last revaluation for Council's investment properties was dated
30/6/2016.
Attachment 2 Page 38
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018
The Hills Shire Council
Notes to the Financial Statements
for the year ended 30 June 2018
Note 12. Payables and borrowings
$ ’000
Payables
Goods and services – operating expenditure Security bonds, deposits and retentions Other (City of Parramatta)
Total payables
TOTAL PAYABLES AND BORROWINGS (a) Payables and borrowings relating to restricted assets
There are no restricted assets (external or internal) applicable to the above payables and borrowings
$ ’000
(b) Current payables and borrowings not anticipated to be settled within the next twelve months
The following payables and borrowings, even though classified as current, are not expected to be settled in the next 12 months.
Payables – security bonds, deposits and retentions
$ ’000
(d) Financing arrangements
(i) Unrestricted access was available at balance date to the following lines of credit:
Bank overdraft facilities (1) Asset Finance Leasing Credit cards/purchase cards Total financing arrangements Undrawn facilities as at balance date:
– Bank overdraft facilities – Credit cards/purchase cards – Asset Financing Lease
Total undrawn financing arrangements
1. The bank overdraft facility may be drawn at any time and may be terminated by the bank without notice.
Accounting policy for payables and borrowings Payables
These amounts represent liabilities for goods and services provided to the Council prior to the end of financial year that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Council does not have any borrowings.
Finance leases
Council has no finance leases.
1,000 2017
68 6,073
1,000
2017
6,068 5,000
5,000
68 33,286
6,008 Current
21,814
1,000 73
–
2018
73 50,237 23,521
24,552
50,237
6,073
6,068
5,000 1,000 19,677 33,286
Current
9,765
2017 2018
18,254 18,254 21,814
5,000 2018
Attachment 2 Page 39
AUDIT COMMITTEE MEETING 21 AUGUST, 2018
Financial Statements 2018
The Hills Shire Council
Notes to the Financial Statements
for the year ended 30 June 2018
Note 13. Provisions
$ ’000
Provisions
Employee benefits:
Annual leave Sick leave Long service leave Gratuities
Sub-total – aggregate employee benefits