Queensland Art Gallery Annual Report 2002-03

In the 2003 financial year, the Gallery amended its accounting policy in relation to the recognition of the value of these donated Art Works, and has now brought them to account in the Gallery's Statement of Financial Position at their market value at the time of acquisition. Restated financial information is presented in Note 17 to show the information that would have been disclosed in the 2002 and 2003 financial reports had the donated Art Works been treated in accordance with the amended accounting policy. (f) Depreciation and Amortisation of Plant and Equipment Depreciation on plant and equipment is calculated on a straight-line basis so as to write-off the net cost or revalued amount of each depreciable asset, less its estimated residual value, progressively over its estimated useful life to the Gallery. Where assets have separately identifiable components, these components are assigned useful lives distinct from the asset to which they relate. Any expenditure that increases the originally assessed capacity or service potential of an asset is capitalised, and the new depreciable amount is depreciated over the remaining useful life of the asset to the Gallery. Major depreciation rates used are listed below and are consistent with the prior year unless otherwise stated: Depreciation Rates Plant and Equipment Computers Motor Vehicles Printers Other (g) Cash Assets 30<\b 25% 20<\b 10<\b For the purposes of the Statement of Financial Position, cash assets include all cash and cheques receipted, but not banked, as well as deposits at call with financial institutions. It also includes liquid investments with short periods to maturity that are convertible readily to cash on hand at the Gallery's option and that are subject to a low risk of changes in value. (h) Receivables Trade debtors are recognised at the nominal amounts due at the time of sale or service delivery, with settlement being generally required within 30 days from the invoice date. The collectability of receivables is assessed periodically with provision being made for doubtful debts. Bad debts were written-off in the period in which they are recognised. (i) Inventories Inventories represent stock on hand for sale through the Gallery Store operations and are valued at the lower of cost and net realisable value. Cost is assigned on a weighted average basis and includes expenditure incurred in acquiring the inventories and bringing them to their existing condition. Net realisable value is determined on the basis of the Gallery Store's normal selling pattern. Expenses associated with marketing, selling and distribution are deducted to determine net realisable value. UJ Payables Payables are recognised for amounts payable in the future for goods or services received, whether or not billed to the Gallery. Creditors are generally unsecured, not subject to interest charges and are normally settled within 30 days of invoice receipt. (k) Other Financial Assets Investments are measured at cost and interest and dividend revenues are recognised on an accrual basis. Included in the Investment balance are State Government Contributions of $6.4 million. These funds are restricted as per an agreement with the State Government which states that only the interest derived from these funds can be used by the Foundation for acquisitions or the exhibition progam of the Gallery. (I) Interest Bearing Liabilities Loans are unsecured and are carried at the face value of the principal outstanding. Interest is accrued over the period it becomes due and recognised as part of payables. (m) Provision for Employee Entitlements Wages, Salaries and Annual Leave Wages, salaries and annual leave due but unpaid at reporting date recognised in the Statement of Financial Position include related on-costs such as payroll tax, workcover premiums and employer superannuation contributions. The new Enterprise Bargaining Agreement for public sector employees is anticipated to be approved early in 2003-04. As it will be backdated to June 2003, accruals are recognised for the impact of this event. Also. the provision for annual leave accrued at 30 June 2003 is restated at 2003-04 pay rates, as required by AASB 1028. Annual leave entitlements are accrued on a pro-rata basis in respect of services provided by employees up to balance date, having regard to current rates of pay and on-costs. Annual leave entitlements are provided for at their nominal value. Long Service Leave Under the Queensland Government's long service leave scheme a levy is made on the Gallery to cover this expense. Amounts paid to employees for long service leave are claimed from the scheme as and when leave is taken. No provision for long service leave is recognised in the financial statements, the liability being held on a whole-of-government basis and reported in the whole-of-government financial report prepared pursuant to AAS 31 - Financial Reporting by Governments. Superannuation Employees of the Queensland Art Gallery are members of QSuper. Contributions to employee superannuation plans are charged as expense as the contributions are paid or become payable. No liability is recognised for accruing superannuation benefits in these financial statements, the liability being held on a whole-of-government basis and reported in the whole of Government financial report prepared pursuant to AAS 31 - Financial Reporting by Governments. (n) Taxation The Gallery's activities are exempt from Commonwealth taxation with the exception of Fringe Benefits Tax (FBT) and Goods and Services Tax (GST). As such, input tax credits receivable and GST payable from/to the Australian Taxation Office are recognised and accrued. (o) Insurance The Gallery's non-current physical assets and other risks are insured through the Queensland Government Insurance Fund, premiums being paid on a risk assessment basis. In addition, the Gallery pays premiums to Workcover Queensland in respect of its obligations for employee compensation. 59