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assets, the carrying value of non-infrastructure assets will be comparable to the fair value which is
the estimated recoverable amount and therefore a separate impairment calculation is not required.
See note 4 (i).
Cost
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the consolidated income statement during the financial period in which they are
incurred.
Depreciation
Land is not depreciated. The cost of improvements to or on leasehold properties is amortised over
the expected lease term or the estimated useful life of the improvement to the Group, whichever is
the shorter. Depreciation on other assets is calculated using the straight line method to allocate their
cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:
Maximum Economic Useful Life*
Infrastructure assets
Ballast 60 years
Bridges 100 years
Culverts 100 years
Rail 110 years
Sleepers 70 years
Signals & Communications 30 years
Turnouts 60 years
Tunnels 100 years
As at 30 June 2017 less than 5% of the assets are being depreciation at the maximum useful life
applicable to their relevant class.
*Depending on the age and location of particular assets, the economic life may vary. The maximum
economic useful lives are reviewed at the end of each financial year end and adjusted if required.
The current year review resulted in a maximum useful life change for bridges from 40 years to 100
years and tunnels from 50 years to 100 years to be applied prospectively. There is no intention to
review assets already capitalised and the impact on future years would be impracticable to determine
to a sufficient level of certainty. It has not been necessary to adjust useful lives of bridges and
tunnels capitalised as Infrastructure assets are adjusted through the fair value altering the cost
base for depreciation and the rates applicable to the individual assets.
Capital work in progress and capitalisation
Work in progress comprises expenditure on incomplete capital works. Expenditure on the acquisition
of new infrastructure assets is capitalised when these new assets increase the net present value of
future cash flows.
Infrastructure assets in the course of construction are classified as capital work in progress. Capital
works in progress are recorded at cost, and are not depreciated until they have been completed and
the assets are ready for economic use.
(c) Property, plant and equipment (continued)
Non-Infrastructure assets
Buildings 50 years
IT & Other equipment 4 years
Motor vehicles 5 years
Other equipment 40 years
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NOTE 7
NON-FINANCIAL ASSETS AND LIABILITIES (CONTINUED)