NOTE 01
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Any revaluation increment is credited to the asset
revaluation reserve included in the equity section of
the Consolidated 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). Revaluation increments and decrements
recognised are allocated to the infrastructure asset
carrying amounts within the CGUs on a pro rata basis.
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
and equipment and leasehold improvements were
revalued at 30 June 2008 and 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. Items of property, plant and equipment are
either derecognised on disposal or when no further
future economic benefits are expected from its use.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount and are
included in the Consolidated Income Statement. Upon
disposal or derecognition, any revaluation reserve
relating to the asset is transferred to retained earnings.
(n) Inventories
Inventories are valued at lower of cost and net
realisable value. Cost is assigned on a first in first
out basis.
(o) Property, plant and equipment
The rail infrastructure assets vested in the Group at
1 July 1998 covered all interstate mainline track and
associated land, trackside and related assets under
Commonwealth jurisdiction, and include rail, sleepers,
ballast, designated crossing loops, turnouts, signals
and communications equipment, bridges, culverts,
tunnels and specified rolling stock.
Infrastructure assets are shown at fair value
(inclusive of revaluations and impairments) less
accumulated depreciation, based on periodic, but
at least triennial revaluations. Any accumulated
depreciation at the date of revaluation is eliminated
against the gross carrying amount of the asset
and the net amount is restated to the revalued
amount of the asset. All other property, plant
and equipment are stated at historical cost less
accumulated depreciation, and any accumulated
impairment losses. Historical cost includes
expenditure that is directly attributable to the
acquisition of the items.
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 the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged
to the Consolidated Income Statement during the
financial period in which they are incurred.
Land is not depreciated. 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.
Depreciation on other assets is calculated using the
straight line method to allocate their cost or revalued
amounts, net of their residual values, over their
estimated useful lives, as follows:
Maximum Economic Useful Life *
Infrastructure assets
Ballast. . . . . . . . . . . . . . . . . . 60 years
Bridges. . . . . . . . . . . . . . . . . . 40 years
Culverts. . . . . . . . . . . . . . . . . 100 years
Rail. . . . . . . . . . . . . . . . . . . .110 years
Sleepers. . . . . . . . . . . . . . . . . . 70 years
Signals & Communications. . . . . . . . . .30 years
Turnouts . . . . . . . . . . . . . . . . . . 15 years
Tunnels . . . . . . . . . . . . . . . . . . 50 years
Non Infrastructure assets
Buildings. . . . . . . . . . . . . . . . . .50 years
IT & Other equipment. . . . . . . . . . . . 4 years
Motor vehicles. . . . . . . . . . . . . . . . 5 years
Other equipment. . . . . . . . . . . . . . 40 years
* Depending on the age and location of particular assets, the
economic life may vary.
(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.
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