or cash generating unit (CGU) exceeds it
recoverable amount.
As the Group applies fair value valuations to
most non-financial assets, the carrying value
will be the fair value which is the estimated
recoverable amount and therefore a separate
impairment calculation is not required.
(r) 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.
(s) 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 agree-
ment which provides a pricing cap over the third
party infrastructure asset between Kalgoorlie
and Perth which completes track access be-
tween the east and west coast of Australia.
(t) 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.
(u) 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 can be reliably
estimated. Provisions are not recognised for
future operating losses.
Where there are a number of similar obligations,
the likelihood that an outflow will be required
in settlement is determined by considering the
class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow
with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present
value of management’s best estimate of the
expenditure required to settle the obligation at
the reporting date.
(v) Employee benefits
(i) Short term obligations
Liabilities for wages and salaries, including
non-monetary benefits expected to be settled
NOTE 01
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
60
