Queensland Art Gallery Annual Report 1997-98

v~ Notes to and Forming Part of the Accounts for year ended 30 June 1998 NOTE I. Summary of significant accounting policies (a) Basis of Accounts The accounts have been prepared in accordance with the Australian Accounting Standards issued by the Australian accounting bodies as endorsed by the Financial Management Standard 1997. Revenue and expenses are brought to account on an accrual basis. The accounts are in accordance with conventional historical cost principles except for certain assets at valuation. (b) Corporate Administration Agency The Corporate Administration Agency (CAA) was established on 1 July 1997, as a unit of Arts Queensland The CAA provides corporate support to the Gallery in the areas of Finance and Human Resources. The CAA processed all financial transactions in respect of the Gallery's General Fund during 1997/98. (c) Comparative Figures Because the CAA processed all transactions in relation to Program Delivery Expenses, previous year's figures are unavailable in the CAA format for the Gallery's program areas. (d) Inventories Inventories represent stock on hand for sale through the Gallery Store operations and are valued at cost (e) Investments Investments are recorded at cost and income is brought to account on an accrual basis. (f) Non-Current Assets The Gallery's non-current physical asset recording threshold for Plant and Equipment is set at $2,000 and the asset revaluation threshold is set at $1,000,000. The Gallery's Plant and Equipment are recorded in accordance with the Treasurer's policy 'Recording and Valuation of Non-Current Physical Assets in the Queensland Public Sector'. The Gallery's Art Works assets including gifts are recorded in accordance with the Treasurer's policy 'Recording and Valuation of Non-Current Physical Assets in the Queensland Public Sector' and are revalued by the Gallery's curatorial staff on an annual basis for insurance purposes. Amounts incidental to their purchase e.g. freight etc are not considered to be part of the asset cost and are treated as an expense. The valuation of the Gallery's Research Library Materials represents the cost of replacing the core collection of monographs, serials and slides of the Gallery's Art Works in the event of loss of the Library's collection. These items are determined as being essential for replacement to support the Gallery's research and exhibition development objectives. Queens Iand Art Ga 11 eryBoard of Trustees (g) Amortisation and Depreciation Depreciation is charged on plant and equipment using the straight line method at rates based on the estimated useful life of the assets to the Art Gallery. For each class of depreciable asset the following depreciation rates were used: Class Computers Motor Vehicles Other Printers Depreciation Rates 30% 25% 10% 20% (h) Provision for Employee Entitlements Provision has been made for the liability for various employee entitlements and related costs in accordance with the Australian Accounting Standard, AAS30: Accounting for Employee Entitlements. Recreation Leave is accrued and shown as a current liability. Accumulated Sick Leave does not normally exceed the Sick Leave taken in any year. Consequently no liability has been brought to account The method of calculating Long Service Leave differs from previous reporting years in that it is now only calculated for employees of the Gallery having frve years of service, and is measured by the use of a shorthand method derived by the Queensland State Actuary. The result of this method does not differ materially from that which would be arrived at by calculation of the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. The method used incorporates consideration of expected future wage and salary levels and experience of employee departure and periods of service. The assumed rate of salary inflation and discount rate are based on Commonwealth Government bond yields at the reporting date and the expected long term gap between salary inflation and investment return . (i) Services Provided by the Queensland Cultural Centre Trust The Arts Legislation Amendment Act 1997 transferred the assets and liabilities of the Queensland Cultural Centre Trust (QCCT) that was abolished in December 1997 to the State, and the Corporate Administration Agency became the manager of the Cultural Centre precinct The QCCT provides a number of services to the Gallery at the Queensland Cultural Centre. These services include building maintenance and repairs, electricity, security, cleaning, air-conditioning and telephone rental. The cost of these services to the Queensland Art Gallery for the 1997/98 year was $1,945,000. U) Leasing Arrangements The Board of Trustees has a signed lease agreement with the Queensland Cultural Centre Trust for the main Art Gallery building located in the Queensland Cultural Centre Complex. The Trust does not charge rent on the premises occupied by the Art Gallery. The provision of the building and items of frtout, including plant and equipment, forms part of this agreement