Parks Victoria - Annual Report 2009-10

FINANCIAL REPORTNOTES TO THE FINANCIAL STATEMENTSFor The Financial Year Ended 30 June 20102.7 Non Financial Assets (continued)Non–current physical assets such as national parks, other Crown land, and heritage assets are measuredat fair value with regard to the property’s highest and best use after due consideration is made for anylegal or constructive restrictions imposed on the asset, public announcements or commitments made inrelation to the intended use of the asset. Theoretical opportunities that may be available in relation tothe asset are not taken into account until it is virtually certain that the restrictions will no longer apply.Road network assets (including earthworks of the declared road networks but excluding land underroads) are measured at fair value, determined by reference to the asset’s depreciated replacement cost.Land under roads which was acquired prior to 1 July 2009 is not recognised. Land under roads which wasacquired on or after 1 July 2009 is recognised at cost.The fair value of cultural depreciated assets and collections, heritage assets and other non-currentphysical assets that the State intends to preserve because of their unique historical, cultural orenvironmental attributes, is measured at the replacement cost of the asset less, where applicable,accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expiredfuture economic benefits of the asset and any accumulated impairment.Revaluations of non-current physical assetsNon-current physical assets measured at fair value are revalued in accordance with FRD103D issued bythe Minister for Finance. This revaluation process normally occurs every five years, based upon the asset’sGovernment Purpose Classification, but may occur more frequently if fair value assessments indicatematerial changes in value. Revaluation increases or decreases arise from differences between an asset’scarrying value.Revaluation increases are credited directly to equity in the Physical asset revaluation surplus, except tothe extent that an increase reverses a revaluation decrease in respect of that class of property, plant andequipment, previously recognised as an expense (other economic flows) in the net result, the increase isrecognised as income (other economic flows) in determining the net result.Revaluation decreases are recognised immediately as expenses (other economic flows) in the net results,except to the extent that a credit balance exists in the revaluation reserve in respect of the same class ofproperty, plant and equipment, and they are debited to the revaluation reserve.Revaluation increases and decreases relating to individual assets within a class of property, plant andequipment, are offset against on another within that class but are not offset in respect of assets indifferent classes.(iii) Crown LandCrown land is measured at fair value with regard to the property’s highest and best use afterdue consideration is made for any legal or constructive restrictions imposed on the land, publicannouncements or commitments made in relation to the intended use of the land. Theoreticalopportunities that may be available in relation to the asset are not taken into account until it is virtuallycertain that the restrictions will no longer apply.64 Parks Victoria - Annual Report 2009-10