Note 11: Intangible assets

Accounting policy

Software acquisition and development

Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software.

Costs that are directly associated with the development of software for internal use by the Office are recognised as an intangible asset. Direct costs include the software development and employee costs.

Staff training costs are recognised as an expense when incurred.

Costs associated with maintaining computer software are recognised as an expense when incurred.

Costs associated with development and maintenance of the Office's website are recognised as an expense when incurred.

Amortisation

The carrying value of an intangible asset with a finite life is amortised on a straight-line basis over its useful life. Amortisation begins when the asset is available for use and ceases at the date that the asset is derecognised. The amortisation charge for each year is recognised in the surplus or deficit.

The useful life and associated amortisation rate of intangible assets have been estimated at between 2.5 and 5 years (20% - 40%).

Critical accounting estimates and assumptions

Determining the amortisation rates for intangible assets requires judgement as to the likely period of use of the assets. Different assessments of useful lives would result in different values being determined for amortisation costs, accumulated amortisation and net book values.

Breakdown of intangible assets and further information

Movements for each class of intangible asset are as follows:

  Acquired software Internally generated software Total
  $000 $000 $000
Cost    
Balance at 1 July 2016 4,162 120 4,282
Additions 505 272 777
Disposals - - -
Balance at 30 June 2017 4,667 392 5,059
Additions - 313 313
Disposals - - -
Reclassification (80) 80  
Balance at 30 June 2018 4,587 785 5,372
Accumulated amortisation and impairment losses   
Balance at 1 July 2016 3,636 120 3,756
Amortisation expense 365 - 365
Disposals - - -
Balance at 30 June 2017 4,001 120 4,121
Amortisation expense 298 31 329
Disposals - - -
Reclassification (56) 56  
Balance at 30 June 2018 4,243 207 4,450
Carrying amounts  
Balance at 1 July 2016 526 - 526
Balance at 30 June 2017 666 272 938
Balance at 30 June 2018 344 578 922

There are no restrictions over the title of the Office's intangible assets. No intangible assets are pledged as security for liabilities.