the asset belongs, unless the asset’s value in use
can be estimated to be close to its fair value.
An impairment exists when the carrying value
of an asset or cash generating unit exceeds its
estimated recoverable amount. The asset or
cash generating unit is then written down to its
recoverable amount.
Impairment is assessed at each reporting
date. Impairment is primarily recorded in the
Consolidated Income Statement. The exception,
is where a credit balance to previous periods’
revaluation increments exist in the Asset
Revaluation Reserve, then the impairment loss
is debited to the asset revaluation reserve to the
extent that the asset had previously been revalued.
At 30 June 2012 the Group recognised an
impairment loss of $290.2m on the North‑South
Corridor (refer also note 16).
(ii) Revaluations
The Group’s infrastructure assets were
revalued as at 30 June 2011. Whilst the June
2005 revaluation was only applied to South
Australian and Western Australian owned
assets, the June 2008 and June 2011 revaluation
applies to all leased and owned infrastructure
assets across the network. These assets were
revalued using a discounted cash flow approach
to provide an estimate of the fair value of
infrastructure assets as there is no similar
market quoted assets. Revaluation of assets
is only applied to infrastructure assets on the
basis that non infrastructure such as motor
vehicles, information technology and other
non‑infrastructure assets are transferable within
the Group and have a short life and a ready
market. The written down value of these assets
is in line with their fair value.
The cash flow forecasts relate only to the revenues
and expenses incurred from the continuing use
of existing assets, and specifically do not include
future improvements or enhancements to the
respective assets. The valuation was determined in
conjunction with external advisors and thereafter
approved by the Board.
Any revaluation increment is credited to the asset
revaluation reserve included in the equity section
of the Balance Sheet, except to the extent that
it reverses a revaluation decrement of the same
asset previously recognised in the Consolidated
Income Statement, in which case the increase is
recognised in the Consolidated Income Statement
(net of tax).
The Group has elected that the deemed cost of
assets on hand at 30 June 2005 is the revalued
amount of those assets. Infrastructure assets
included in plant & equipment and leasehold
improvements were revalued at 30 June 2008
and June 2011.
Any accumulated depreciation as at the
revaluation date is eliminated against the
gross carrying amount of the asset and the net
amount is restated to the revalued amount of
the asset.
Gains and losses on disposals are determined
by comparing proceeds with the carrying
amount. These are included in the Consolidated
Income Statement.
Upon disposal or derecognition, any revaluation
reserve relating to a particular asset being sold is
transferred to retained earnings.
Where an item of property, plant and equipment
is specifically identified it is derecognised upon
disposal or when no further future economic
benefits are expected from its use or disposal.
At 30 June 2012 the Group recognised a reversal
of the 2011 revaluation for infrastructure assets
on the East West corridor for $311.9m. This
adjusts the carrying value of these assets to the
estimated fair value of the infrastructure assets in
the East West corridor.
(iii) Leasehold improvements
The cost of improvements to or on
leasehold properties is amortised over
the expected lease term or the estimated
useful life of the improvement to the Group,
whichever is the shorter.
Note 01
Summary of significant accounting policies (continued)
66
