Endeavour Energy Annual Performance Report - Parliament of New ...

12 property Plant and Equipment continued
System
assets
$’000
Land &
buildings
$’000
Plant &
equipment
$’000
Under
construction
$’000
Total
$’000
Carrying amounts
At 1 July 2009 2,784,620 396,320 111,516 377,034 3,669,490
At 30 June 2010 3,325,057 367,831 104,878 477,967 4,275,733
At 1 July 2010 3,325,057 367,831 104,878 477,967 4,275,733
At 30 June 2011 3,637,680 380,770 99,920 593,571 4,711,941
Recoverable amount
At 30 June 2010
Gross replacement cost 8,251,273 368,141 242,973 477,967 9,340,354
Accumulated depreciation (3,228,905) (310) (138,095) – (3,367,310)
Depreciated replacement cost 5,022,368 367,831 104,878 477,967 5,973,044
Accumulated impairment losses (1,697,311) – – – (1,697,311)
Recoverable amount at 30 June 2010 3,325,057 367,831 104,878 477,967 4,275,733
At 30 June 2011
Gross replacement cost 12,850,662 383,454 250,328 593,571 14,078,015
Accumulated depreciation (6,327,209) (2,684) (150,408) – (6,480,301)
Depreciated replacement cost 6,523,453 380,770 99,920 593,571 7,597,714
Accumulated impairment losses (2,885,773) – – – (2,885,773)
Recoverable amount at 30 June 2011 3,637,680 380,770 99,920 593,571 4,711,941
Property, Plant and Equipment Impairment Losses
Endeavour Energy’s valuation policy provides for a valuation of assets to be undertaken at least every five years
in conjunction with NSW Treasury Policy TPP 07-1 Valuation of Physical Non-Current Assets at Fair Value.
A revaluation of system assets was undertaken by an independent valuer and recognised as at 30 June 2011.
System assets were valued at Optimised Depreciated Replacement Cost (ODRC) (refer Note 2(k)).
The recoverable amount of the cash generating unit was determined using the Value in Use methodology and
compared to the carrying amount. The estimate of Value in Use was determined using a discount rate of 7.95%.
The carrying amount was determined to be higher than its recoverable amount and an additional impairment loss
of $1,188.5m was recognised as a reduction to the Asset Revaluation Reserve.
Capitalised borrowing costs
Capitalised borrowing costs for the year ended 30 June 2011 amounted to $2.2m (2010:$14.1k), with a weighted
average capitalisation rate of 7.8% (2010: 7.8%)
Endeavour Energy Annual Performance Report 2010–11
73