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.
(s) Capital work in progress and
capitalisation
Work in progress comprises expenditure on incomplete
capital works. Expenditure on the acquisition of new
infrastructure assets is capitalisedwhen 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.
(t) 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 lease arrangements, ARTC may provide funds
to other bodies 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 in conjunction with the
relevant lease 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.
Other intangible assets relate to contractual
rights in relation to a wholesale access agreement
which provides a pricing cap over the third party
infrastructure asset between Kalgoorlie and Perth
which completes track access between the east and
west coast of Australia.
(u) 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.
(v) Provisions
Provisions for legal claims, service warranties 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)
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