Local Government Asset Accounting Manual

By: amit butola | 23 Jan 2012 11:45 am

Section	Page
1. Introduction 2. Planning & Implementation 3. Asset Control and Ownership 4. Asset Classification and their Use 5. Capitalisation Principles and Materiality 6. Recording of Assets 7. General Valuation Principles 8. Specific Asset Valuation Components 9. Depreciation and Useful Life 10. Asset Management Issues 11. Reporting in the Financial Statements	101 201 301 401 501 601 701 801 901 1001 1101
Appendices
1. Summary of relevant Australian Accounting Concepts, Australian Accounting Standards and the Local Government Accounting Regulations 2. Glossary of Terms 3. References and Further Reading 4. Indicative Useful Lives Water and Sewerage Assets 5. Indicative Useful Lives for Councils Non-Current Assets 6. Guidance on Asset Classifications 7. Accounting for Drainage Assets 8. Accounting for Roads 9. Annual Reports by Councils (LGA s.428)	A101 A201 A301 A401 A501 A601 A701 A801 A901
1. INTRODUCTION	101
1.1 Accounting Standard 1.2 Framework 1.3 Discussion 1.3.1 Australian Accounting Standard AAS 27 1.3.2 Accounting Standards 1.3.3 Definition of local government assets 1.3.4 Benefits of accounting for non-current assets 1.3.5 Topics in this Manual 1.3.6 Planning for implementation 1.3.7 Systems considerations 1.3.8 Leased assets 1.3.9 Level of asset recording 1.3.10 Internal accounting procedures manual 1.3.11 Application of the manual to other entities	101 102 104 104 104 105 106 107 108 108 108 108 109 109
2. PLANNING FOR IMPLEMENTATION	201
2.1 Accounting Standard 2.2 Framework 2.3 Discussion 2.3.1 Background 2.3.2 Determination of strategy 2.3.3 Implementation issues	201 202 203 203 203 204
3. ASSET CONTROL AND OWNERSHIP	301
3.1 Accounting Standard 3.2 Framework 3.3 Discussion 3.3.1 Background 3.3.2 Definition & recognition of assets 3.3.3 Vesting of land 3.3.4 Determination of control 3.4 Worked example	301 302 304 304 304 305 305 311
4. ASSET CLASSIFICATION AND THEIR USE	401
4.1 Accounting Standard 4.2 Framework 4.3 Discussion 4.3.1 Method of classifying Assets 4.3.2 Asset Functions 4.3.3 Asset Types 4.4 Worked example	401 402 404 404 404 408 417
5. CAPITALISATION PRINCIPLES AND MATERIALITY	501
5.1 Accounting Standard 5.2 Framework 5.3 Discussion 5.3.1 Background and conceptual framework 5.3.2 Distinction between capital and maintenance expenditure 5.3.3 Level of disaggregation of assets 5.3.4 Concept of materiality 5.3.5 Determination of capital or recording thresholds 5.3.6 Treatment of aggregate assets 5.3.7 Recording of minor assets 5.4 Worked example	501 502 504 504 504 506 508 510 511 512 512
6. RECORDING OF ASSETS	601
6.1 Accounting Standard 6.2 Framework 6.3 Discussion 6.3.1 Identification and recording of existing assets 6.3.2 Recording of assets acquired after 1st January, 1993 6.3.3 Assets partially acquired at 1st January 1993 6.3.4 Treatment of costs of construction and other major contracts 6.3.5 Disposal and scrapping of assets 6.3.6 Private contributions to asset construction/acquisition 6.3.7 Council contributions to asset construction/acquisition 6.3.8 Asset register 6.4 Worked example	601 603 605 605 609 610 610 611 613 613 613 614
7. GENERAL VALUATION PRINCIPLES	701
7.1 Accounting Standard 7.2 Framework 7.3 Discussion 7.3.1 Background 7.3.2 The Concept of Deprival Value & Valuation Methodologies 7.3.3 Recoverable amount test 7.3.4 Other factors in the valuation process 7.3.5 Heritage assets 7.3.6 Land under roads	701 703 705 705 705 708 709 710 711
8. SPECIFIC ASSET VALUATION COMPONENTS	801
8.1 Accounting Standard 8.2 Framework 8.3 Discussion 8.3.1 Revaluation of assets 8.3.2 Application of general valuation principles 8.3.3 Land 8.3.4 Land improvements 8.3.5 Roads 8.3.6 Buildings 8.3.7 Other structures 8.3.8 Plant and equipment & office equipment 8.3.9 Furniture and fittings 8.3.10 Other assets 8.4 Worked example	801 803 806 806 806 809 810 811 812 813 813 814 814 814
9. DEPRECIATION AND USEFUL LIFE	901
9.1 Accounting Standard 9.2 Framework 9.3 Discussion 9.3.1 Concept of depreciation 9.3.2 Useful life 9.3.3 Residual life 9.3.4 Residual life and asset condition 9.3.5 Future and deferred maintenance 9.3.6 Aggregation of assets for depreciation purposes 9.3.7 Reassessment of remaining useful life 9.3.8 Depreciation of heritage assets 9.3.9 Commencement of depreciation charges 9.3.10 Renewals accounting 9.3.11 Depreciation rates - Income Tax Assessment Act 9.3.12 Depreciation methods 9.4 Worked example	901 902 904 904 904 905 906 906 907 908 909 909 909 909 909 911
10. ASSET MANAGEMENT ISSUES	1001
10.1 Framework 10.2 Discussion 10.2.1 Purpose 10.2.2 Background 10.2.3 Characteristics of asset management 10.2.4 Asset acquisition 10.2.5 Asset maintenance 10.2.6 Asset condition levels 10.2.7 Asset life and condition assessment 10.2.8 Risk management factors 10.2.9 Management Plans & Long Term Planning 10.3 Worked example	1001 1003 1003 1003 1003 1005 1007 1007 1009 1011 1012 1013
11. REPORTING IN THE FINANCIAL STATEMENTS	1101
11.1 Accounting Standard 11.2 Framework 11.3 Discussion 11.3.1 Purpose 11.3.2 Asset register 11.3.3 Disclosure in the financial statements 11.3.4 Distinction between initial recognition and revaluation of assets 11.3.5 Leased assets 11.3.6 Accounting entries 11.3.7 Annual summary of assets 11.3.8 Extracts of sample financial statements	1101 1102 1103 1103 1003 1104 1105 1107 1108 1114 1114
Appendices
1. Summary of relevant accounting concepts, accounting standards and Local Government Accounting Regulations 2. Glossary of terms 3. Further reading and references 4. Indicative Useful Lives - Water & Sewerage Assets 5. Indicative Useful Lives for Councils Non-current Assets 6. Guidance on Asset Classifications 7. Accounting for drainage assets 8. Accounting for roads 9. Annual Reports by Councils (LGA s.428)	A101 A201 A301 A401 A501 A601 A701 A801 A901

Application & Operative Date

For the purpose of this Standard, each local government is a reporting entity and is therefore
required to prepare general purpose financial reports. This Standard:

(a) applies to each local government in respect of its general purpose financial reports, in
relation to its first reporting period that ends on or after 30 June 1996 and later
reporting periods....(AAS 27, paragraph 3 "June 96 Version").

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