Queensland Art Gallery Annual Report 2006-07

QUEENSLAND ART GALLERY ANNUAL REPORT 06–07 / appendixes 74 Objectives and Principal Activities of the Gallery The Queensland Art Gallery's principal activities in the course of the finan- cial year were to deliver a broad range of outputs as detailed in its Strategic Plan 2007–12 to support the Government's Outcomes and Priorities for Queensland. These outputs were guided by the key strategies contained in the Queensland Arts Industry Sector Development Plan 2007–09, and the guiding principles contained in the Queensland Art Gallery Act 1987 , both of which provide a framework for the delivery of the Gallery's programs and services. 1. Summary of Significant Accounting Policies (a) Basis of Accounting The financial statements have been prepared in accordance with Australian Equivalents to International Financial Reporting Standards (AEIFRS). This financial report is a general purpose financial report. In particular, the financial statements comply with the Treasurer's Minimum Reporting Requirements for the year ending 30 June 2007, and other authoritative pronouncements. Except where stated, the historical cost convention is used. (b) The Reporting Entity The financial statements include the value of all revenues, expenses, assets, liabilities and equity of the Queensland Art Gallery and its controlled entity, the Queensland Art Gallery Foundation. In the process of reporting on the Queensland Art Gallery as a single economic entity, all transactions and balances between the Queensland Art Gallery and the Queensland Art Gallery Foundation have been eliminated. (c) User Charges and Fees User charges and fees controlled by the Gallery are recognised as revenues when invoices for the related services are issued. User charges and fees are controlled by the Gallery where they can be deployed for the achievement of the Gallery's objectives. (d) Grants and Contributions Grants, contributions, donations and gifts that are non-reciprocal in nature are recognised as revenue in the year in which the Gallery obtains control over them. Where grants are received that are reciprocal in nature, revenue is accrued over the term of the funding arrangements. Contributed assets are recognised at their fair value. Contributions of services are recognised only when a fair value can be determined reliably and the services would be purchased if they had not been donated. (e) Cash and Cash Equivalents For the purposes of the Balance Sheet and the Cash Flow Statement, cash assets include all cash and cheques receipted but not banked at 30 June as well as deposits at call with financial institutions. It also includes investments with short periods to maturity that are readily convertible to cash on hand at the Gallery's or issuer's option and that are subject to a low risk of changes in value. (f) Receivables Trade debtors are recognised at the nominal amounts due at the time of sale or service delivery. Settlement on these amounts is required within 30 days from invoice date. The collectability of receivables is assessed periodically with provision being made for doubtful debts. All known bad debts were written-off as at 30 June. (g) Inventories Inventories represent stock on hand for sale through the Gallery Store operations and publications on hand for sale direct to distributors 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. The cost of inventories is approximated using either the standard cost method or the retail inventory method depending on which is applicable to the item. (h) Non-Current Assets Classified as Held for Sale Non-current assets held for sale consist of those assets which the Gallery has determined are available for immediate sale in their present condition and their sale is highly probable within the next 12 months. These assets are measured at the lower of the assets' carrying amounts or their fair values less costs to sell. The assets are not depreciated. (i) Acquisition of Assets Actual cost is used for the initial recording of all asset acquisitions. Cost is determined as the value given as consideration plus costs incidental to the acquisition, including all other costs incurred in getting the assets ready for use. The Queensland Art Gallery Foundation purchases Art Works and then donates them to the Gallery. These particular Art Works are included in the total value of the Art Works in the Gallery's Balance Sheet and in the Income Statement as revenue. The balance disclosed in the financial statements reflects the fair market value of the donated assets. Assets acquired at no cost or for nominal consideration are recognised at their fair value at date of acquisition in accordance with AASB 116 Property, Plant and Equipment . (j) Property, Plant and Equipment The Gallery's Collection (Art Works), the Gallery Library's Heritage Collection and all items of plant and equipment with a value equal to or in excess of $5000 are recognised for financial reporting purposes. Items of plant and equipment with a lesser value are expensed in the year of acquisition. (k) Revaluation of Non-Current Physical Assets The Gallery's Art Works and the Gallery Library's Heritage Collection are considered to be heritage and cultural assets and measured at fair value in accordance with AASB 116 Property, Plant and Equipment and Queensland Treasury's Non-Current Asset Accounting Policies for the Queensland Public Sector . The Gallery's Art Works, including gifts, are revalued on an annual basis for insurance purposes by the Gallery's experienced specialist curatorial staff who are considered experts in their field. The basis of valuation for Art Works is current market values. Art Works that have had a material movement in valuation are revalued during the year using recent auction results. On this basis, the Art Works are comprehensively revalued each year. The Gallery Library's Heritage Collection is revalued at the end of the year using current prices listed on AbeBooks.com, an internal portal for NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS 2006–07