Notes to the financial statements (continued) Section 3: Operational assets and liabilities (continued) 11. Property, plant and equipment, and intangible assets (continued) B. Accounting policy: intangible assets i. Cost
Costs incurred to develop software code that enhances or modifies, or creates additional capability to Western Power’s existing on-premise systems are capitalised as computer software only when the recognition criteria for an intangible asset are met – being the software is identifiable and controlled in a way that allows future economic benefits to be obtained, and others’ access to those benefits restricted. B. Accounting policy: intangible assets (continued) ii. Amortisation In order to recognise the loss of service potential of intangible assets, amortisation is calculated using the straight-line method over the estimated useful lives in table 18 below, making allowances where appropriate for residual values. Intangible assets received on disaggregation of Western Power Corporation are amortised over their estimated residual useful lives. The residual values, estimated useful lives and amortisation methods of intangible assets 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. Derecognition An intangible asset 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.
Intangible assets represent identifiable capitalised computer software and intellectual property, and are recognised at historical cost less accumulated amortisation and any accumulated impairment losses. Subsequent costs are included in intangible assets only when it is probable the item associated with the cost will generate future economic benefits and the cost can be measured reliably. Internally generated intangible assets are recognised only if: • an asset is created that can be identified • it is probable the asset created will generate future economic benefits • the development cost of the asset can be measured reliably. Development cost includes materials and labour, as well as any other expenditure directly attributable to bringing the intangible asset to a working condition for its intended use. Where no internally generated intangible asset can be recognised the development cost is expensed to profit or loss. All research costs are expensed to profit or loss. Software-as-a-Service (SaaS) arrangements A SaaS arrangement is a service contract that provides Western Power the right to access application software of a cloud provider over a contracted period. Costs incurred to configure or customise this software, as well as ongoing fees for the right to access are expensed to profit or loss when the service is provided.
Table 18: Amortisation Class of intangible assets
Estimated useful life (years)
Computer software Intellectual property
2.5 - 10 3 - 25
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Western Power Annual Report 2025
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