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HORSHAM RURAL CITY COUNCIL


NOTES TO THE FINANCIAL STATEMENTS (Cont.) FOR THE YEAR ENDED 30th JUNE, 2014


1 SIGNIFICANT ACCOUNTING POLICIES (continued)


(b) Change in Accounting Policies (cont.) AASB 13 Fair Value Measurement (cont). AASB 13 requires prospective application from 1 January 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, Council has not made any new disclosures required by AASB 13 for the 2012 comparative period (please see note 21).


Other than the additional disclosures, the application of AASB 13 has not had any material impact on the amounts recognised in the financial statements.


All Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:


Level 1 - Quoted (unadjusted) market prices in active markets for identical assets and liabilities.


Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable and


Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.


For the purpose of fair value disclosures, Council has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.


In addition, Council determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.


AASB 19 Employee benefits In the current year, Council has applied AASB 119 Employee Benefits (as revised in 2011) and the related consequential amendments for the first time. AASB 119 changes the definition of short-term employee benefits. These were previously benefits that were due to be settled within twelve months after the end of the reporting period in which the employees render the related service, however, short-term employee benefits are now defined as benefits expected to be settled wholly before twelve months after the end of the reporting period in which the employees render the related service. As a result, accrued annual leave balances which were previously classified by Council as short-term benefits no longer meet this definition and are now classified as long-term benefits. This has resulted in a change of measurement for that portion of annual leave provision from an undiscounted to discounted basis.


This change in classification has not materially altered Councils measurement of the annual leave provision.


(c) Revenue Recognition Rates, grants and contributions Rates, grants and contributions (including developer contributions) are recognised as revenues when the Council obtains control over the assets comprising these receipts.


Control over assets acquired from rates is obtained at the commencement of the rating year as it is an enforceable debt linked to the rateable property or, where earlier, upon receipt of the rates.


A provision for doubtful debts on rates has not been established as unpaid rates represents a charge against the rateable property that will be recovered when the property is next sold.


Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and are valued at their fair value at the date of transfer.


Income is recognised when Council obtains control of the contribution or the right to receive the contribution, it is probable that the economic benefits comprising the contribution will flow to the Council and the amount of the contribution can be measured reliably.


Annual Report 2013-2014 q Page 9


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