Introduction
The Commission controls property, plant and equipment in fulfilling its objectives and conducting its activities. These assets represent the key resources that the Commission uses for the delivery of these services.
4.1 Property, plant, and equipment
| Gross carrying amount | Accumulated depreciation | Net carrying amount | ||||
| 2022 $ |
2021 $ |
2022 $ |
2021 $ |
2022 $ |
2021 $ |
|
| Leasehold improvements | 387,164 | 287,163 | (162,053) | (127,972) | 225,111 | 159,191 |
| Office and computer equipment | 16,146 | 16,146 | (6,458) | (3,229) | 9,688 | 12,917 |
| Leased motor vehicles | 49,397 | 103,377 | (29,896) | (50,876) | 19,501 | 52,501 |
| Net carrying amount | 452,707 | 406,686 | (198,407) | (192,077) | 254,300 | 224,609 |
Initial recognition
Items of property, plant, and equipment are measured initially at cost. Where an asset is acquired for nil or nominal cost, the cost is its fair value at the date of acquisition.
The cost of leasehold improvements is capitalised and depreciated over the remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter.
The cost of motor vehicle under a lease is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments, as determined at the inception of the lease.
Subsequent measurement
Property, plant, and equipment is subsequently measured at fair value less accumulated depreciation and impairment. Fair value is determined with regard to the asset’s highest and best use (considering legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset).
Impairment
Property, plant, and equipment is tested for impairment whenever there is an indication that an asset may be impaired.
The assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is considered to be an impairment and is written off as an ‘other economic flow’, except to the extent that it can be offset to an asset revaluation surplus amount applicable to that class of asset.
The recoverable amount for most assets is measured at the higher of current replacement cost and fair value less costs to sell. Recoverable amount for assets held primarily to generate net cash inflows is measured at the higher of the present value of future cash flows expected to be obtained from the asset and fair value less costs to sell.
4.1.1 Reconciliation of movements in carrying amount of property, plant, and equipment
| Leasehold improvements | Office and computer equipment | Construction in progress | Leased motor vehicles | Total | Total | |||||
| 2022 $ |
2021 $ |
2022 $ |
2021 $ |
2022 $ |
2021 $ |
2022 $ |
2021 $ |
2022 $ |
2021 $ |
|
| Opening balance | 159,191 | 144,832 | 12,917 | – | – | 35,980 | 52,501 | 34,449 | 224,609 | 215,261 |
| Additions | 100,001 | – | – | – | – | – | – | 31,384 | 100,001 | 31,384 |
| Disposals | – | – | – | – | – | – | (19,967) | – | (19,967) | – |
| Reclassification | – | – | – | 16,146 | – | – | – | – | – | 16,146 |
| Transfer | – | 35,980 | – | – | – | (35,980) | – | – | – | – |
| Depreciation | (34,081) | (21,621) | (3,229) | (3,229) | – | – | (13,033) | (13,332) | (50,343) | (38,182) |
| Closing balance | 225,111 | 159,191 | 9,688 | 12,917 | – | – | 19,501 | 52,501 | 254,300 | 224,609 |
4.2 Intangible assets
| Gross carrying amount | Accumulated depreciation | Net carrying amount | ||||
| 2022 $ |
2021 $ |
2022 $ |
2021 $ |
2022 $ |
2021 $ |
|
| Capitalised software | 3,290,202 | 2,477,152 | (1,457,968) | (1,043,909) | 1,832,234 | 1,433,243 |
| Work-in-progress | 82,610 | 805,027 | – | – | 82,610 | 805,027 |
| Net carrying amount | 3,372,812 | 3,282,179 | (1,457,968) | (1,043,909) | 1,914,844 | 2,238,270 |
4.2.1 Reconciliation of movements in carrying amounts of intangible assets
| Capitalised software | Work-in-progress | Total | ||||
| 2022 $ |
2021 $ |
2022 $ |
2021 $ |
2022 $ |
2021 $ |
|
| Opening balance | 1,433,243 | 1,377,071 | 805,027 | 422,215 | 2,238,270 | 1,799,286 |
| Additions | – | – | 91,232 | 725,136 | 91,232 | 725,136 |
| Reclassification | – | – | (600) | (16,146) | (600) | (16,146) |
| Transfer | 813,050 | 326,178 | (813,050) | (326,178) | 0 | – |
| Depreciation | (414,058) | (270,006) | – | – | (414,058) | (270,006) |
| Closing balance | 1,832,235 | 1,433,243 | 82,609 | 805,027 | 1,914,844 | 2,238,270 |
Intangible assets which comprise capitalised software and work-in-progress represent separately identifiable assets without physical substance. Work-in-progress represents the enhancement work on the Victorian Government Careers website and the development work on the State Workforce Data Analysis and Collection Application.
Initial recognition
Purchased intangible assets are initially measured at cost when the recognition criteria in AASB 138 Intangible Assets are met. Costs incurred subsequent to initial acquisition are capitalised when it is expected that additional future economic benefits will flow to the Commission.
Subsequent measurement
Intangible assets with finite useful lives are amortised as an ‘expense from transactions’ on a straight-line basis over their useful lives.
Impairment
Intangible assets with finite useful lives are tested for impairment annually and whenever an indication of impairment is identified.
4.3 Asset depreciation
| 2022 $’000 |
2021 $’000 |
|
| Capitalised software | 414,058 | 270,006 |
| Leased motor vehicles | 13,033 | 13,332 |
| Leasehold improvements | 34,081 | 21,621 |
| Office and computer equipment | 3,229 | 3,229 |
| Total depreciation | 464,401 | 308,188 |
Depreciation is calculated on a straight-line basis, at rates that allocate the asset’s value, less any estimated residual value, to its useful life. Depreciation begins when the asset is available for use in the location and condition necessary for it to be capable of operating in the manner intended by the Commission.
The estimated useful lives, residual values and depreciation method are reviewed at least annually. Typical estimated useful lives applicable for the different classes are included in the table below:
Useful life of assets
| Asset Class | Useful life (years) |
| Leasehold improvements | 10 |
| Office and computer equipment | 4-5 |
| Leased motor vehicles | 2-3 |
| Intangible assets | 7 |
Leasehold improvements are depreciated over the shorter of the lease term and their useful lives.