Notes to the financial statements (continued) Section 3: Operational assets and liabilities (continued) 11. Property, plant and equipment, and intangible assets A. Accounting policy: Property, plant and equipment i. Cost Property, plant and equipment represents the capital works and plant required for the operation of the business, and is recognised at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost is determined as the fair value of the asset at the date of acquisition or construction, and includes all costs of purchase, delivery, installation and borrowing costs (where a qualifying asset), as well as any other expenditure directly attributable to bringing the acquired or self- constructed asset to a working condition for its intended use. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Gifted network assets are recognised at fair value at the point the assets are energised. Subsequent costs are included in property, plant and equipment only when it is probable the item associated with the cost will generate future economic benefits and the cost can be measured reliably. The carrying amounts of items replaced are derecognised. All other repairs and maintenance, plus minor capital acquisitions less than $5,000, are expensed to profit or loss in the reporting years in which they are incurred.
Works under construction Works under construction represents costs incurred on uncompleted capital projects. Upon completion of a project, the costs are capitalised and transferred to property, plant and equipment and/or intangible assets to commence depreciation and/or amortisation over the estimated useful lives. ii. Depreciation In order to recognise the loss of service potential of property, plant and equipment, depreciation is calculated using the straight-line method over the estimated useful lives below, making allowances where appropriate for residual values. See table 17 below. Property, plant and equipment received on disaggregation of Western Power Corporation is depreciated over the estimated residual useful lives. No depreciation is provided on freehold land, easements and assets while under construction. The residual values, estimated useful lives and depreciation methods of property, plant and equipment are reviewed annually, and adjusted prospectively if appropriate at the end of each reporting year, with any changes recognised as a change in accounting estimate. iii. Rehabilitation costs Upon recognition of an item of property, plant and equipment, the cost of the item includes the present value of the anticipated costs of rehabilitating the site on which it is located. iv. Derecognition An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains and losses arising from the derecognition of an asset are determined by comparing proceeds with carrying amount and are recognised in profit or loss.
Table 17: Depreciation
Estimated useful life (years)
Class of property, plant and equipment
Buildings Plant and equipment
40 4 - 50
Western Power Annual Report 2025
101
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