Home' Annual Report : Annual Report 2015 Contents K. INTANGIBLE ASSETS
Intangible assets with finite lives that are acquired separately
are carried at cost less accumulated amortisation and
accumulated impairment loss. Amortisation is recognised on
a straight-line basis over their estimated useful lives as follows:
Core business systems
The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for
on a prospective basis.
L. LEASED ASSETS
Leases, where substantially all the risks and benefits
incidental to the ownership of the asset, but not the legal
ownership, are transferred to the company are classified
as finance leases. Finance leases are capitalised. Assets and
liabilities are recorded at the present values of the minimum
lease payments, including any guaranteed residual values at
date of inception.
Lease payments for operating leases, where substantially
all the risks and benefits remain with the lesser, are charged
as expenses in the periods in which they are incurred.
In the event that lease incentives are received to enter into
operating leases, such incentives are recognised as a liability.
The aggregate benefits of incentives are recognised as a
reduction of rental expense on a straight line basis, except
where another systematic basis is more representative of
the time pattern in which economic benefits from the leased
asset are consumed.
M. INVESTMENTS AND FINANCIAL ASSETS
Investments in controlled entities are carried at lower of
cost and net recoverable amount in the parent company’s
individual financial statements.
Held to maturity investments
Investments such as bonds and term deposits that are
intended to be held to maturity are initially measured at fair
value less cost and are subsequently measured at amortised
cost using the effective interest method. The effective
interest rate method is a method of calculating amortised
cost of a financial asset and of allocating interest income
over the relevant period.
Financial Instruments such as non-derivative financial
assets available-for-sale are recorded at fair value through
comprehensive income. Revaluation is accumulated in an
investment revaluation reserve in equity.
All financial assets are recognised and derecognised on
trade date where the purchase or sale of a financial asset
is under a contract whose terms require delivery of the
financial asset within the timeframe established by the
market concerned, and are initially measured at fair value,
plus transaction costs, except for those financial assets
classified as at fair value through comprehensive income,
which are initially measured at fair value.
Financial assets are classified into the following categories:
“held-to-maturity” investments, “available-for-sale” financial
assets and loans and receivables. The classification depends
on the nature and purpose of the financial assets and is
determined at the time of initial recognition.
Trade creditors represent liabilities for goods and services
provided to the Consolidated Entity prior to the end of
the financial year and which are unpaid. The amounts are
unsecured and are usually paid within 30 days of recognition.
O. DERIVATIVE FINANCIAL INSTRUMENTS
It is not current CPA Australia policy to enter into
foreign exchange contracts to hedge foreign currency
P. EMPLOYEE BENEFITS
Employee benefits expected to be settled within one year
have been measured at the amounts expected to be paid.
Employee benefits payable later than one year have been
measured at the present value of the estimated future cash
outflows to be made for those benefits. Discount rate used
reflects national government securities that most closely
match the terms of maturity of the related liabilities.
The provision for annual leave represents the amount which
CPA Australia has a present obligation to pay resulting from
employees’ ser vices provided up to balance date.
The provision has been calculated at the amount s expected
to be paid when the liability is settled and includes on-costs.
Long service leave
The liability for employee benefits for long service leave
represents the present value of the estimated future
cash outflows to be made by the employer resulting from
employees’ ser vices provided up to the balance date.
In determining the liability for employee benefits, account
has been taken of future increases in wage and salar y rates
and CPA Australia’s experience with staff depar tures.
Related on-cost s also have been included in the liability.
Defined benefit plan
A small percentage of staff par ticipates in the CPA Australia
defined benefit plan.
Mercer Benefit Services has provided actuarial calculations
of the current benefit of the defined benefit liability.
Actuarial gains and losses are recognised in full, directly
in retained earnings, in the period in which they occur,
and presented in the statement of comprehensive income.
Past ser vices cost is recognised immediately to the extent
that the benefits are already vested, and otherwise
amortised on a straight-line basis over the average period
until the benefits become vested.
The defined benefit obligation recognised in the Statement
of financial position represents the present value of
the defined benefit obligation, adjusted for unrecognised
past service cost, net of the fair value of plan assets.
Any asset resulting from this calculation is limited to the past
ser vice cost, plus the present value of available refunds and
reduc tions in future contributions to the plan. The plan is
no longer open to new members as of 31 December 1999.
Defined contribution superannuation
Contributions to defined contribution superannuation
plans are expensed when paid.
Q. CASH AND CASH EQUIVALENTS
Cash and cash equivalent s comprise cash on hand,
cash in banks, at call deposits and bank bills maturing
within less than 90 days from the date of inception.
R. COMPARATIVE AMOUNTS
When a change in accounting policy is applied
retrospectively in accordance with Australian Accounting
Standards, we have adjusted the opening balance of each
affected component of equity for the earliest prior period
presented and the other comparative amounts disclosed for
each prior period presented as if the new accounting policy
had always been applied.
S. WEBSITE COSTS
The primar y focus of the CPA Australia website is as
an advertising, branding and information tool for the
organisation and its members. All maintenance and
operational expenditure have been treated as expenses
incurred in the period.
T. CRITICAL JUDGEMENTS IN APPLYING THE ENTITY’S
The following are the critical judgements that management
has made in the process of applying the Group’s accounting
policies and that have the most significant effect on the
amounts recognised in the financial statements:
Management judgement is applied in determining the
following key assumptions used in the calculation of
long ser vice leave at balance date:
• future increases in wages and salaries;
• future on-cost rates;
• experience of employee departures
and period of service; and
• defined benefit plan
Intangible and other assets
Management’s judgement is applied to
depreciation / amor tisation rates, useful lives and
CPA AUSTRALIA 2015 INTEGRATED REPORT
80 fINANCIAL REPORT
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