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.