Speech Pathology Australia 2022 Annual Report

Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of buildings, plant and other equipment. The following useful lives are applied: • plant and equipment: 3-20 years • leasehold improvements: 3-5 years • computer hardware: 3-7 years In the case of leasehold property, expected useful lives are determined by reference to comparable owned assets or over the term of the lease, whichever is the shorter. The residual value and useful life are reviewed and updated as required, but at least annually. Gains or losses arising on the disposal of plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other expenses. 4.6.1 Right-of-use assets A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset. Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the Company expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The company has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. 4.6.2 Lease liability A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index, or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.

which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Grant revenue Funding received under a legally enforceable agreement that contains sufficiently specific performance obligations is recognised as revenue from contracts with customers under AASB 15 using the 5-step model. If funding is not received under an enforceable agreement or does not contain sufficiently specific performance obligations, it is recognised in profit or loss when the Company initially recognises the associated asset, after having recognised any related amounts as required by AASB 1058. Other revenue Other revenue is recognised when it is received or when the right to receive payment is established. Statement of financial position balances relating to revenue recognition Contract assets and liabilities Where amounts received from customers (members) are based on the delivery of specified services or fulfillment of conditions established in the contract, the amounts recognised as revenue in a given period do not necessarily coincide with the amounts billed to or certified by the customer. When a performance obligation is satisfied by transferring a promised good or service to the customer before the customer pays consideration or the before payment is due, the Company presents the contract as a contract asset, unless the Company's rights to that amount of consideration are unconditional, in which case the Company recognises a receivable. When an amount of consideration is received from a customer prior to the entity transferring a good or service to the customer, the Company presents the contract as a contract liability. 4.3 Operating expenses Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin. 4.4 Investment property Investment properties are properties held to earn rentals and/ or for capital appreciation and are accounted for using the cost model and depreciated using the straight line method over 40 years. Rental income and operating expenses from investment property are reported within revenue and other expenses respectively. Investment properties are derecognised when disposed of or when there is no future economic benefit expected. 4.5 Property, plant and equipment Plant and other equipment Plant and other equipment (comprising fittings and furniture) are initially recognised at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by the Company’s management. Plant and other equipment are subsequently measured using the cost model, cost less subsequent depreciation and impairment losses.

15 2022 ANNUAL REPORT Speech Pathology Australia