Annual Report - Northern Health

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Note 1: Summary of Significant Accounting PoliciesNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Loans and receivablesTrade receivables, loans, term deposits with maturity greater than three months and other receivables are recorded at amortised cost, using the effective interest method, less impairment.The effective interest rate method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate thatexactly discounts estimated future cash receipts through the expected life of the financial asset, or where appropriate, a shorter period.Held-to-maturity investmentsWhere Northern Health has the positive intent and ability to hold investments to maturity they are measured at amortised cost less impairment losses.Available for sale financial assetsOther financial assets held by the entity are classified as being available-for-sale and are measured at fair value. Gains and losses arising from changes in fair value are recognised directly in equityuntil the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in profit or loss for the period. Fair value isdetermined in the manner described in Note 19.Impairment of Financial AssetsAt the end of each reporting period Northern Health assesses whether there is objective evidence that a financial asset or group of financial asset is impaired.Bad and doubtful debts for financial assets are assessed on a regular basis. Those bad debts considered as written off as well as the allowance for doubtful receivables are recognised as expenses inthe net result.Where the fair value of an investment in an equity instrument at balance date has reduced by 20 percent or more than its cost price or where its fair value has been less than its cost price for a periodof 12 or more months, the financial asset is treated as impaired.In assessing impairment of statutory (non contractual) financial assets, which are not financial instruments, professional judgement is applied in assessing materiality using estimates, averages andother computational methods in accordance with AASB 136 Impairment of Assets.Net Gain/(Loss) on Financial InstrumentsNet gain/(loss) on financial instruments includes:Realised and unrealised gains and losses from revaluations of financial instruments that are designated at fair value through profit or loss or held-for-trading;Impairment and reversal of impairment for financial instruments at amortised cost; andDisposals of financial assets.Revaluations of Financial Instruments at Fair ValueThe revaluation gain/(loss) on financial instruments at fair value excludes dividends or interest earned on financial assets.(j) Non Financial AssetsInventoriesInventories include goods and other property held either for sale or for distribution at no or nominal cost in the ordinary course of business operations. It excludes land held for sale and depreciableassets.Inventories held for distribution are measured at cost, adjusted for any loss of service potential. All other inventories, including land held for sale, are measured at the lower of cost and net realisablevalue.Bases used in assessing loss of service potential for inventories held for distribution include current replacement cost and technical or functional obsolescence. Technical obsolescence occurs when anitem still functions for some or all of the tasks it was originally acquired to do, but no longer matches existing technologies. Functional obsolescence occurs when an item no longer functions the wayit did when it was first acquired.Cost is assigned to land for sale (undeveloped, under development and developed) and to other high value, low volume inventory items on a specific identification of cost basis.Cost for all other inventory is measured on the basis of weighted average cost.Inventories acquired for no cost or nominal considerations are measured at current replacement cost at the date of acquisition.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 12 of 60
Note 1: Summary of Significant Accounting PoliciesNon Financial Physical Assets Classified as Held for SaleNotes To and Forming Part of the Financial StatementsNorthern Health Annual Report 2011/2012Non financial physical assets and disposal groups and related liabilities are treated as current and are classified as held for sale if their carrying amount will be recovered through a sale transactionrather than through continuing use. This condition is regarded as met only when the sale is highly probable, the asset's sale (or disposal group) is expected to be completed within 12 months from thedate of classification, and the asset is available for immediate use in the current condition.Non financial physical assets and disposal groups classified as held for sale are treated as current and are measured at the lower of carrying amount and fair value less costs to sell and are not subjectto depreciation.Property, Plant and EquipmentAll non current physical assets are measured initially at cost and subsequently revalued at fair value less accumulated depreciation and impairment. Where an asset is acquired for no or nominalcost, the cost is its fair value at date of acquisition.Crown Land is measured at fair value with regard to the property’s highest and best use after due consideration is made for any legal or constructive restrictions imposed on the asset, publicannouncements or commitments made in relation to the intended use of the asset. Theoretical opportunities that may be available in relation to the asset(s) are not taken into account until it isvirtually certain that any restrictions will no longer apply.Land and Buildings are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment.Plant, Equipment and Vehicles are recognised initially at cost and subsequently measured at fair value less accumulated depreciation and impairment. Depreciated historical cost is generally areasonable proxy for depreciated replacement cost because of the short lives of the assets concerned.Cultural, Collections, Heritage Assets and Other Non-Current Physical Assets that the State intends to preserve because of their unique historical, cultural or environmental attributes aremeasured at the cost of replacing the asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefitsof the asset.Restrictive nature of cultural and heritage assets, Crown land and infrastructure assets. During the reporting period Northern Health may hold cultural assets, heritageassets, Crown land and infrastructure assets.Such assets are deemed worthy of preservation because of the social rather than financial benefits they provide to the community. The nature of these assets means that there are certain limitationsand restrictions imposed on their use and/or disposal.Revaluations of Non-current Physical AssetsNon-current physical assets measured at fair value are revalued in accordance with FRD 103D. This revaluation process normally occurs every five years, based upon the asset’s Government PurposeClassification, but may occur more frequently if fair value assessments indicate material changes in values. Independent valuers are used to conduct these scheduled revaluations and any interimrevaluations are determined in accordance with the requirements of the FRDs. Revaluation increments or decrements arise from differences between an asset’s carrying value and fair value.Revaluation increments are credited directly to the asset revaluation reserve, except that, to the extent that an increment reverses a revaluation decrement in respect of that class of asset previouslyrecognised at an expense in net result, the increment is recognised as income in the net result.Revaluation decrements are recognised immediately as expenses in the net result, except that, to the extent that a credit balance exists in the asset revaluation reserve in respect of the same class ofassets, they are debited directly to the asset revaluation surplus.Revaluation increases and revaluation decreases relating to individual assets within an asset class are offset against one another within that class but are not offset in respect of assets in differentclasses.Revaluation surpluses are normally not transferred to accumulated funds on derecognition of the relevant asset.In accordance with FRD 103D, Northern Health's non current physical assets were assessed to determine whether revaluation of the non-current physical assets was required.Northern Health Financial Report Appendix to the 2011 - 2012 Annual Report Page 13 of 60
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contentsReport of Operations02 Chai
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CEO’s ReportThe 2011-12 financial
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Northern Health BoardProfessor Glen
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Northern Health Board cont’dProfe
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Corporate GovernanceAppointment of
Page 15 and 16: Corporate Governance cont’dMr Nev
Page 17 and 18: Executive Team cont’dAdjunct Prof
Page 19 and 20: Organisation StructureNorthern Heal
Page 21 and 22: Our Services cont’dAdmitted Patie
Page 23 and 24: Our Services cont’dOther Services
Page 25 and 26: Our AchievementsDeliver quality hea
Page 27 and 28: Our Achievements cont’dBuild corp
Page 29 and 30: Our Achievements cont’dThe outsta
Page 31 and 32: Our Achievements cont’dEnhancing
Page 33 and 34: Our Achievements cont’dand diabet
Page 35 and 36: Our Achievements cont’dThe Depart
Page 37 and 38: Northern Health FoundationThe North
Page 39 and 40: Statement of PrioritiesThe Statemen
Page 41 and 42: Statement of Priorities cont’dVic
Page 43 and 44: Performance PrioritiesFinancial per
Page 45 and 46: Corporate InformationGeneral Inform
Page 47 and 48: Corporate InformationWhistleblowers
Page 49 and 50: Financial Summary2011/12 2010/11000
Page 51 and 52: Disclosure Index cont’dLegislatio
Page 53 and 54: Northern HealthFinancial Statements
Page 55 and 56: Northern Health Annual Report 2011/
Page 61 and 62: Note 1: Summary of Significant Acco
Page 65: Note 1: Summary of Significant Acco
Page 77 and 78: Notes To and Forming Part of the Fi
Page 79 and 80: Note 2a: Analysis of Revenue by Sou
Page 81 and 82: Note 3: ExpensesNotes To and Formin
Page 83 and 84: Note 3a: Analysis of Expenses by So
Page 89 and 90: Note 11: Property, Plant & Equipmen
Page 91 and 92: Note 12: Intangible AssetsNotes To
Page 93 and 94: Note 14: BorrowingsNotes To and For
Page 97 and 98: Note 18: Reconciliation of Net Resu
Page 99 and 100: Note 19: Financial Instruments (con
Page 107 and 108: Note 23a: Responsible Persons Discl
Page 109 and 110: Note 24: Events Occurring after the
Page 111 and 112: Northern Health Financial Report Ap
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Broadmeadows Health Service35 Johns
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Annual Report - Northern Health

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