24 Annual Report
of financial performance. Any subsequent increase on revaluation that
off-sets a previous decrease in value recognised in the statement of
financial performance will be recognised first in the statement
of financial performance up to the amount previously expensed,
and then credited to the revaluation reserve for that class of asset.
The Library collection was revalued as at 30 June 2007 by independent
valuer, David Smith of DTZ NZ Ltd.
Additions
The cost of an item of property, plant and equipment is recognised as
an asset only when it is probable that future economic benefits or service
potential associated with the item will flow to the Commission and the
cost of the item can be measured reliably.
Disposals
Gains and losses on disposals are determined by comparing the proceeds
with the carrying amount of the asset. Gains and losses on disposals are
included in the statement of financial performance.
When revalued assets are sold, the amounts included in revaluation
reserves in respect of those assets are transferred to general
Subsequent costs
Costs incurred subsequent to initial acquisition are capitalised only
when it is probable that future economic benefits or service potential
associated with the item will flow to the Law Commission and the cost
of the item can be measured reliably.
The costs of day-to-day servicing of property, plant and equipment are
recognised in the statement of financial performance as they are incurred.
Depreciation
Depreciation is provided on a straight-line basis on all property,
plant and equipment other than land, at rates that will write off the cost
(or valuation) of the assets to their estimated values over their useful
lives. The useful lives and associated depreciation rates of major classes
of assets have been estimated as follows:
Computer equipment
3 years
(33.33%)
Office equipment
5 years
(20%)
Furniture and fittings
10 years
(10%)
Library collection
5 years
(20%)
The residual value and useful life of an asset is reviewed, and adjusted
if applicable, at each financial year-end.
