Notes to the financial statements
Year ended 31 March 2016
3 Significant accounting policies (continued)
(e)
Plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the asset.
Subsequent expenditure relating to plant and equipment is added to the carrying amount of the asset when it is
probable that future economic benefit in excess of the originally assessed standard of performance of the existing
asset will flow to the Group. All other subsequent expenditure is recognised as an expense in the period in which
it is incurred.
Depreciation is provided on the straight-line basis over the estimated useful lives of each component of an item
of plant and equipment as follows:
Furniture and fixtures
5 – 7 years
Equipment
5 – 10 years
Computers and office equipment
1 – 5 years
Gains or losses arising from the retirement or disposal of plant and equipment are determined as the difference
between the net disposal proceeds and the carrying amount of the asset, and are recognised in the Statement of
Total Return on the date of retirement or disposal.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted as
appropriate.
(f)
Finance leases
Leases which the Group has substantially transferred all the risks and rewards incidental to ownership of the
asset to the lessee are classified as finance leases. The leased asset is derecognised and the present value of the
lease receivable (net of initial direct costs for negotiating and arranging the lease) is recognised as finance lease
receivable on the Statement of Financial Position. The difference between the gross receivable and the present
value of the lease receivable is recognised as unearned interest income.
Each lease payment received is applied against the gross investment in the finance lease receivable to reduce
both the principal and the unearned interest income. The interest income is recognised in the Statement of
Total Return on a basis that reflects a constant periodic rate of return on the net investment in the finance
lease receivable.
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A-REIT ANNUAL REPORT
2015/2016
