2023 annual report final WEB - Flipbook - Page 62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 2. Summary of Significant Accounting Policies
(continued)
(e) Right-of-use assets (continued)
Right-of-use assets are depreciated on a straight-line
basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the
shorter. Where the consolidated entity expects to
obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated
useful life. Right-of use assets are subject to
impairment or adjusted for any re-measurement of
lease liabilities.
The consolidated entity has elected not to recognise a
right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and
leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
(f) Impairment of Assets
Assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair
value less costs to sell and value in use. As a not-forprofit entity, value in use of property, plant and
equipment and intangible assets at cost includes
depreciated replacement cost.
A liability is classified as current when: it is either
expected to be settled in the Group's normal operating
cycle; it is held primarily for the purpose of trading; it
is due to be settled within 12 months after the
reporting period; or there is no unconditional right to
defer the settlement of the liability for at least 12
months after the reporting period. All other liabilities
are classified as non-current.
(i) Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial
position comprise cash on hand, deposits held at call
with financial institutions, other short-term, highly
liquid investments with original maturities of three
months or less, and overdrafts. Bank overdrafts are
shown within short term borrowings in current
liabilities on the statement of financial position.
(j) Trade and Other Receivables
Trade and other receivables include amounts due from
customers for goods sold and services performed in
the ordinary course of business. Receivables expected
to be collected within 12 months of the end of the
reporting period are classified as current assets. All
other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at
fair value and subsequently measured at amortised
cost using the effective interest method, less any
allowance for expected credit loss. Refer to note 2(f)
for further discussion on the determination of
impairment losses.
(g) Income Tax
Christian Outreach Centre is exempt from income tax
under section 50-5 of the Income Tax Assessment
Act 1997.
(h) Current and non-current classification
Assets and liabilities are presented in the statement of
financial position based on current and non-current
classification.
An asset is classified as current when: it is either
expected to be realised or intended to be sold or
consumed in the Group's normal operating cycle; it is
held primarily for the purpose of trading; it is expected
to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless
restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
62
2023 Financials
(k) Property, Plant and Equipment
Property, plant and equipment is carried at cost less,
when applicable, any accumulated depreciation and
impairment loss, and is depreciated on a basis and
rates designed to write off the cost of the assets over
their useful lives, commencing from the time the asset
is available for use.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
gains or losses are included in the statement of
comprehensive income.
Land and buildings are revalued by independent
externally qualified valuations on a selective basis in
agreement with the Group’s lender, Westpac Banking
Corporation. Because not all assets within a class are
valued within a short period of time, INC does not
comply with AASB 116 Property, Plant and Equipment.
It is not feasible to comply with this standard for the
Group at this point.
