(p) Capital work in progress
and capitalisation
Work in progress comprises expenditure on
incomplete capital works. Expenditure on the
acquisition of new infrastructure assets is
capitalised when these new assets increase the
net present value of future cash flows.
Infrastructure assets in the course of
construction are classified as capital work in
progress. Capital works in progress are recorded
at cost, and are not depreciated until they have
been completed and the assets are ready for
economic use.
(q) Intangible assets
Computer software has a finite useful life
and is carried at cost less accumulated
amortisation. Amortisation is calculated using
the straight line method to allocate the cost of
computer software over its estimated useful
life of four years.
Under the NSW Lease, ARTC has provided funds
to CRIA to acquire additional land holdings
to enable the infrastructure to be expanded.
ARTC is not entitled to be reimbursed for this
expenditure but has the right to use the land.
The land rights have a finite useful life expiring
on 4 September 2064 and are carried at cost
less accumulated amortisation. Amortisation
is calculated using the straight line method to
allocate the cost of land rights over its estimated
useful life.
(r) Trade and other payables
These amounts represent liabilities for goods and
services provided to the Group prior to the end of
financial year which are unpaid and are measured
at amortised cost. The amounts are unsecured and
are usually paid within 30 days of recognition.
Due to their short term nature they are
not discounted.
(s) Borrowings
Borrowings are initially recognised at fair value,
net of transaction costs incurred. Borrowings
are subsequently measured at amortised cost.
Any difference between the proceeds (net of
transaction costs) and the redemption amount
is recognised in the Consolidated Income
Statement over the period of the borrowings
using the effective interest method. Fees paid on
the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be
drawn down. To the extent there is no evidence
that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a
prepayment for liquidity services and amortised
over the period of the facility to which it relates.
Borrowings are classified as current liabilities
unless the Group has an unconditional right to
defer settlement of the liability for at least 12
months after the reporting date.
(t) Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of a
qualifying asset (i.e. an asset that necessarily
takes a substantial period of time to get ready
for its intended use or sale) are capitalised as
part of the cost of that asset. All other borrowing
costs are expensed in the period they occur.
Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds.
(u) Provisions
Provisions for legal claims and make good
obligations are recognised when the Group has
a present legal or constructive obligation as
a result of past events, it is probable that an
outflow of resources will be required to settle
the obligation and the amount has been reliably
estimated. Provisions are not recognised for
future operating losses.
Note 01
Summary of significant accounting policies (continued)
67
