Note 28. Property, Plant and Equipment

Property, plant and equipment includes the following classes of assets – land, buildings, leasehold improvements and plant and equipment.  Property, plant and equipment does not include assets held for sale.

Land includes leasehold land held by the Directorate.

Buildings include hospital buildings, community health centres and a multi storey car park. 

Leasehold improvements represent capital expenditure incurred in relation to leased assets.  The Directorate has fit-outs in its leased buildings.

Plant and equipment includes medical equipment, motor vehicles, mobile plant, air conditioning and heating systems, office and computer equipment, furniture and fittings, and other mechanical and electronic equipment.

  2015
$’000
2014
$’000
Land and Buildings    
Land at Fair Value 40,645 40,250
Total Land Assets 40,645 40,250
Buildings at Fair Value a 815,234 771,290
Less: Accumulated Depreciation (16,416) -
Total Written Down Value of Buildings 798,818 771,290
Total Land and Written Down Value of Buildings 839,463 811,540
     
Leasehold Improvements    
Leasehold Improvements at Fair Valueb 6,527 4,811
Less: Accumulated Depreciation (3,088) -
Total Written Down Value of Leasehold Improvements 3,439 4,811
     
Plant and Equipment    
Plant and Equipment at Costc 110,130 107,993
Less: Accumulated Depreciation (66,464) (64,714)
Less: Accumulated Impairment Losses (439) (530)
Total Written Down Value of Plant and Equipment 43,227 42,749
     
Total Written Down Value of Property, Plant and Equipment 886,129 859,100

Assets Under a Finance Lease

Due to a change in Whole-of-Government vehicle leasing arrangements with SG Fleet, from 23 April 2015 vehicle leases for the Directorate are now classified as operating leases.

Carrying Amount of Assets Under a Finance Lease

 

 

Plant and Equipment Under a Finance Lease

-

8,271

Accumulated Depreciation of Plant and Equipment under a Finance Lease

-

(2,307)

Total Written Down Value of Assets Under a Finance Lease

-

5,964

Reconciliation of Property, Plant and Equipment

The following table shows the movement of Property, Plant and Equipment during 2014-2015.

 

Land
$'000

Buildings
$'000

Leasehold
Improvements
$'000

Plant and
Equipment
$'000

Total
$'000

Carrying Amount at 1 July 2014

40,250

771,290

4,811

42,749

859,100

Additions

485

50,193

1,716

17,172

69,566

Revaluation (Decrement)

(90)

-

-

-

(90)

Assets Classified as Held for Sale

-

-

-

-

-

Disposals

-

-

-

(6,999)

(6,999)

Depreciation

-

(22,665)

(3,088)

(10,643)

(36,396)

Depreciation Write Back for Asset Disposals

-

-

-

6,143

6,143

Impairment Losses Recognised in the

   Operating (Deficit)

-

-

-

(217)

(217)

Reversal of Impairment Losses Recognised in

   the Operating (Deficit)

-

-

-

308

308

Other Movements

-

-

-

(5,286)

(5,286)

Carrying Amount at 30 June 2015

40,645

798,818

3,439

43,227

886,129

The following table shows the movement of Property, Plant and Equipment during 2013-14.

 

Land
$'000

Buildings
$'000

Leasehold
Improvements
$'000

Plant and
Equipment
$'000

Total
$'000

Carrying Amount at 1 July 2013

36,827

620,486

6,629

43,978

707,919

Additions

360

183,394

275

11,182

195,212

Revaluation Increments/(Decrement)

3,063

(17,494)

(310)

-

(14,741)

Assets Classified as Held for Sale

-

-

-

(29)

(29)

Disposals

-

-

-

(7,431)

(7,431)

Depreciation

-

(15,096)

(1,783)

(10,763)

(27,642)

Depreciation Write Back for Asset Disposals

-

-

-

5,221

5,221

Impairment Losses Recognised in the

   Operating (Deficit)

-

-

-

(530)

(530)

Reversal of Impairment Losses Recognised in

   the Operating (Deficit)

-

-

-

1,121

1,121

Carrying Amount at 30 June 2014

40,250

771,290

4,811

42,749

859,100

Valuation of Non-Current Assets

Certified practicing registered valuers AON Risk Solutions performed an independent valuation of the Directorate’s Land, Buildings and Leasehold Improvements as at 30 June 2014.  Names and qualifications of the valuers are:

  1. Mr Geoff Pyman FAPI, MRICS – Certified Practising Valuer
  2. Mr Michael Farley – Certified Practising Valuer

The next valuation will be undertaken during 2016-17.

Fair Value Hierarchy

The Directorate is required to classify property, plant and equipment into a fair value hierarchy that reflects the significance of the inputs used in determining their fair value. The fair value hierarchy is made up of the following three levels:

  • Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the Directorate can access at the measurement date;
  • Level 2 – inputs other than quoted prices included within Level 1 that are observable for asset or liability, either directly or indirectly; and
  • Level 3 – inputs that are unobservable for particular assets or liabilities.

Details of the Directorate’s property, plant and equipment at fair value and information about the fair value hierarchy as at 2014-2015 are as follows:

Classification According to Fair Value Hierarchy 2015

 

Level 1

Level 2

Level 3

Total

 

$’000

$’000

$’000

$’000

Property, Plant and Equipment at Fair Value

 

 

 

 

Land

-

-

40,645

40,645

Buildings

-

2,845

795,973

798,818

Leasehold Improvements

-

-

3,439

3,439

 

-

2,845

840,057

842,902

Details of the Directorate's property, plant and equipment at fair value and information about the Fair Value Hierarchy as at 30 June 2014 is as follows:

Classification According to Fair Value Hierarchy 2014

 

Level 1

Level 2

Level 3

Total

 

$’000

$’000

$’000

$’000

Property, Plant and Equipment at Fair Value

 

 

 

 

Land

-

-

40,250

40,250

Buildings

-

2,845

768,445

771,290

Leasehold Improvements

-

-

4,811

4,811

 

-

2,845

813,506

816,351

Transfers between Categories

There have been no transfers between Levels 1, 2 and 3 during the current and previous reporting period.

Valuation Techniques, Inputs and processes

Level 2 Valuation Techniques and Inputs

Valuation Technique: the technique used to value land and buildings is the market approach that reflects recent transaction prices for similar properties and buildings (comparable in location and size).

Inputs: Prices and other relevant information generated by market transactions involving comparable land and buildings were considered. Regard was taken of the Crown Lease terms and tenure, the Australian Capital Territory Plan and the National Capital Plan, where applicable, as well as current zoning.

Level 3 Valuation Techniques and Inputs

Valuation Technique: Land where there is no active market or significant restrictions is valued through the market approach which values a selection of land with similar approximate utility.

Inputs: In determining the value of land with similar approximate utility significant adjustments to market based data was required.

Valuation Technique: Buildings and Leasehold Improvements were considered specialised assets by the valuers and measured using the cost approach that reflects the cost to a market participant to construct assets of comparable utility adjusted for obsolescence. For buildings historical cost per square metre of floor area was also used in measuring fair value.

Inputs: In determining the value of buildings and leasehold improvements regard was given to the age and condition of the assets, their estimated replacement cost and current use. This required the use of data internal to the Directorate.

There has been no change to the above valuation techniques during the year.

Fair Value measurements using significant unobservable inputs (Level 3)

2015

Land
$’000

Buildings
$’000

Leasehold
Improvements
$’000

Fair Value at beginning of the reporting period

40,250

768,445

4,811

Additions

485

50,193

1,716

Revaluation increments/(decrements) recognised in Other

   Comprehensive Income

(90)

-

-

Depreciation

-

(22,665)

(3,088)

Fair Value at end of the reporting period

40,645

795,973

3,439

2014

Land
$’000

Buildings
$’000

Leasehold
Improvements
$’000

Fair Value at beginning of the reporting period

36,827

620,486

6,629

Additions

360

180,549

275

Revaluation increments/(decrements) recognised in Other

   Comprehensive Income

3,063

(17,494)

(310)

Depreciation

-

(15,096)

(1,783)

Fair Value at end of the reporting period

40,250

768,445

4,811

Information about significant unobservable inputs (Level 3) in fair value measurements

Item Fair Value as at 30 June Significant
Unobservable Inputs
Range of  Unobservable Inputs
(Weighted Average)
Relationship of Unobservable Inputs to Fair Value
2015
$000
2014
$000
2015 2014
Valuation Technique: Market Approach
Land 40,645 40,250 Selection of land with similar approximate utility and permissible usage $0.40 - $1,200 per m2 $0.40 - $1,200 per m2 Higher value of comparable land increases values
Valuation Technique: Depreciated Replacement Cost
Buildings 795,973 768,445 Consumed physical, functional and economic obsolescence  0% - 92%  0% - 92% Greater consumption of obsolescence reduces values
Leasehold Improvements 3,439 4,811 Consumed physical, functional and economic obsolescence 29% - 88% 29% - 88% Greater consumption of obsolescence reduces values