Document ID: chunk:federal_register_of_legislation:F2022C00554:body:0:p49
Version: federal_register_of_legislation:F2022C00554
Segment Type: other
Provision Reference: 
Character Range: 150881–159286

(18)   –      –      (110)
Depreciation – replacement surface layers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  –   –      –       –       –       –       –       –      (18)   (19)   (37)
Total depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         –   –      (57)    (58)    (57)    (57)    (58)    (57)   (57)   (58)   (459)
Annual surplus/(deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   –   (32)   (136)   (129)   (120)   (112)   (104)   (94)   (91)   (81)   (899)
Revaluation surplus †                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      –   32     –       –       –       –       –       –      –      –      32
NOTES:
   1. Depreciation in years 3–8 reflects the depreciation on the original road. The road surface is fully depreciated over that period. Depreciation in years 9–10 reflects the depreciation on the new service concession asset component (the replacement surface) recognised in year 8. The depreciation calculations are set out in paragraph IE9.
   2. Although these Illustrative Examples use a straight-line depreciation method, it is not intended that this method be used in all cases. Paragraph 60 of AASB 116 requires that, "The depreciation method used shall reflect the pattern in which the asset's future economic benefits are expected to be consumed by the entity." Likewise, for intangible assets, paragraph 97 of AASB 138 requires that, "The depreciable amount of an intangible asset with a finite useful life shall be allocated on a systematic basis over its useful life."
* Financial liability at start of year (Table 6.4) x 6.18%.
  † Adjustment of current replacement cost to include funding cost in measuring the service concession asset in year 2, since the grantor's accounting policy is to expense borrowing costs.

     Table 6.3  Statement of financial position (currency units)
Year                                                                                                                                                                                                                                                                                                                                                                                       1       2         3       4       5       6       7         8         9         10
Service concession asset                                                                                                                                                                                                                                                                                                                                                                   525     972       933     894     855     816     777       738       699       660
 – base layers *
Service concession asset                                                                                                                                                                                                                                                                                                                                                                   –       110       92      73      55      37      18        –         –         –
 – original surface layers *
Service concession asset                                                                                                                                                                                                                                                                                                                                                                   –       –         –       –       –       –       –         110       92        73
 – replacement surface layers
Total service concession asset                                                                                                                                                                                                                                                                                                                                                             525     1,082     1,025   967     910     853     795       848       791       733
Cash (Table 6.1)                                                                                                                                                                                                                                                                                                                                                                           –       –         (200)   (400)   (600)   (800)   (1,000)   (1,200)   (1,400)   (1,600)
Financial liability (Table 6.4)                                                                                                                                                                                                                                                                                                                                                            (525)   (1,082)   (961)   (832)   (695)   (550)   (396)     (343)     (177)     –
Cumulative surplus/(deficit)                                                                                                                                                                                                                                                                                                                                                               –       (32)      (168)   (297)   (417)   (529)   (633)     (727)     (818)     (899)
Revaluation surplus (Table 6.2)                                                                                                                                                                                                                                                                                                                                                            –       32        32      32      32      32      32        32        32        32
NOTES:
   1. In this example, the resurfacing occurs as expected in year 8, when the original road surface is fully depreciated. If the resurfacing occurred earlier, the original road surface would not be fully depreciated, and would need to be derecognised in accordance with AASB 116 before the new component of the service concession asset related to the resurfacing is recognised.
   2. The new component of the service concession asset related to the resurfacing