DISTRICT COUNCIL
OF
PETERBOROUGH
Asset Accounting &
Depreciation Policy
Adopted:- 16 June 2008
Resolution:- 94/06
Reviewed : 18/04/11 Res.No. 60/11
Reviewed : 16/04/12 Res.No. 43/12
S:\GDS\09 Governance\9.63 Policy\Council Policies 2013\Asset Accounting & Depreciation Policy.doc Page 1
DISTRICT COUNCIL of
PETERBOROUGH
ASSEST ACCOUNTING & DEPRECIATION POLICY
Assets shall be recognised and accounted for in accordance with Australian Accounting Standards and the
details contained in this policy.
DEFINITIONS:
Fair value - is the amount for which an asset could be exchanged between a knowledgeable, willing buyer
and a knowledgeable, willing seller in an arm's length transaction.
Materiality - in relation to information, that information which if omitted, misstated or not disclosed has
the potential to adversely affect decisions about the allocation of scarce resources made by users of the
financial report or the discharge of accountability by the management or governing body of the entity.
Consideration - in the context of this policy, shall be recognised in "monetary terms" eg. purchase cost.
PRINCIPLES:
Acquisition of Assets
The cost method of accounting is used for the initial recording of all acquisitions of assets. Cost is
determined as the fair value of the assets given as consideration plus costs incidental to the acquisition,
including architects' fees and engineering design fees and all other costs incurred in getting the assets
ready for use.
Capitalisation
Assets should have a useful life of greater than one year in order for the expenditure to be capitalised and
have a value above the Materiality Thresholds described below. Any expenditure considered to be Capital
must also pass a materiality test. Materiality Thresholds are set so as not to misstate Financial Statements
and to provide a guide whether it is practical from an Administrative perspective that expenditure is
capitalised. No maintenance type expenditure is capitalised. Only upgrade / improvement / enhancement
expenditure greater than 10% of the replacement value is capitalised.
S:\GDS\09 Governance\9.63 Policy\Council Policies 2013\Asset Accounting & Depreciation Policy.doc Page 2
Materiality Thresholds are:
New/Replacement
$5,000
Upgrade/Enhancement
>10% of Replacement Value
Land
$2,000
>10% of Replacement Value
Buildings
$5,000
>10% of Replacement Value
Furniture & Fittings
$2,000
>10% of Replacement Value
Plant & Equipment
$2,000
>10% of Replacement Value
Other
$2,000
>10% of Replacement Value
Infrastructure
Networked/Aggregate Assets - Expenditure can still be capitalised on items that fall below materiality
thresholds individually but operate together as a cohesive whole to form a substantial/significant total
value. Examples are the Computer Network, Library Books, Reserve Furniture.
Asset Stocktake
A stocktake of current Inventory items will be conducted at the time of revaluation.
Revaluations of Non-current Assets
All non-current assets, other than receivables, land held for resale and investments are revalued in
accordance with Australian Accounting Standards and Regulations under the Local Government Act,
1999, which is currently within a five year period. Non-monetary assets received without charge are
recognised as assets and revenues at their fair value at the date of receipt, except for land under roads.
Land under roads and trees are not recognised because there is currently no reliable method of valuation.
Depreciation of Non-current Assets
All non-current assets having a limited useful life are systematically depreciated over their useful lives in
a manner which reflects the consumption of the economic benefits provided by those assets. Land is not a
depreciable asset. Unsealed roads are not depreciated on the basis that the unsealed roads are being
maintained. Depreciation rates shall be reviewed at the time of revaluation.
Current Depreciation Useful Lives:
Depreciation Method
Straight Line
Current Useful Lives
10 – 20 years
Infrastructure – Road Base
Straight Line
100 years
Infrastructure – Road Seal
Straight Line
30 years
Infrastructure - Kerbing
Straight Line
80 years
Infrastructure - Footpaths
Straight Line
10 – 60 years
Infrastructure - Drainage
Straight Line
20 – 100 years
Infrastructure – Bridges / Culverts
Straight Line
80 years
Infrastructure - Furniture
Straight Line
10 – 50 years
Infrastructure - Other
Straight Line
10 – 100 years
N/A
Not Depreciated
Buildings
Straight Line
25 – 100 years
Furniture & Fittings - Computers
Straight Line
2 years
Furniture & Fittings – Library Stock
Straight Line
2 – 10 years
Infrastructure – Unsealed Roads
Land
S:\GDS\09 Governance\9.63 Policy\Council Policies 2013\Asset Accounting & Depreciation Policy.doc Page 3
Furniture & Fittings - Other
Straight Line
10 – 25 years
Plant & Equipment
Straight Line
5 – 20 years
Steamtown – Rolling Stock
Straight Line
50 years
Steamtown - Other
Straight Line
5 – 50 years
Other
Straight Line
5 – 50 years
Non-current Assets Constructed by the Council
The cost of non-current assets constructed by the Council includes the cost of all materials used in
construction, direct labour on the project and plant operating costs. Direct labour costs include an
overhead component to cover leave, training and other employment costs.
Land Held for Resale
Land held for development and/or resale is valued at the lower of cost and net realisable value. Cost
includes the cost of acquisition, development and interest incurred on financing of that land during its
development. Interest and other holding charges incurred after development is complete are recognised
immediately as expenses. Land held for development as community facilities is valued at the lower of
cost and net realisable value. Cost includes the cost of acquisition and development.
REFERENCES:
Strategic Plan:
2.1 Maintain, improve and develop infrastructure to meet current and future needs.
5.1 Responsible and accountable local government
Other Related References:
Australian Accounting Standards; Local Government Act, 1999; and Local Government (Financial
Management) Regulations 1999.
S:\GDS\09 Governance\9.63 Policy\Council Policies 2013\Asset Accounting & Depreciation Policy.doc Page 4