Notes to and forming part of the accounts

1. Summary of significant accounting policies
   The principal accounting policies adopted in preparing the financial statements of the Australian Library and Information Association are stated to assist in a general understanding of these financial statements. The financial statements have been made out in accordance with the requirements of Royal Charter, Australian Accounting Standards and Urgent Issues Group Consensus Views.
   1. Basis of accounting
      The accounts have been prepared on the basis of historical cost and except where stated, do not take into account current valuations of non-current assets. Non-current assets are revalued from time-to-time as considered appropriate by the ALIA general councillors. The ALIA general councillors have not adopted a policy of revaluing non-current assets on a regular basis.
   2. Income tax
      The Australian Library and Information Association is considered to be a non-profit organisation established for community service purposes and is exempt from income tax under subparagraph 23(g)(v) of the Income Tax Assessment Act 1936.
   3. Depreciation
      Depreciation is calculated so as to write-off the net cost of each non-current asset during its expected useful life. Additions are depreciated from the month in which they were acquired.
   4. Stock valuation
      Stock consisting of publications are stated at the lower of cost and net realisable value. Cost for Association publications includes direct material and labour and is assigned to individual items of stock on the basis of average costs. Purchased publications are valued at actual cost.
   5. Employee benefits
      Liabilities for employees' entitlements to wages and salaries, annual leave, sick leave and other current employee entitlements are accrued at nominal amounts calculated on the basis of current wage and salary rates. Liabilities for other employee entitlements which are not expected to be paid or settled within twelve months of balance date are accrued at the present value of future cashflows.
   6. Valuation of non-current assets
      Leasehold land and buildings are carried at cost. Where the carrying amount of an individual non-current asset is greater than the net amount expected to be recovered through the nominal net cash inflows arising from their continued use and subsequent disposal (recoverable amount), the asset is revalued to its recoverable amount. The decrement is recognised as an expense in the statement of income and expenditure.
   7. Foreign currency
      Transactions denominated in a foreign currency are converted at the exchange rate at the date of transaction. Foreign currency receivables and payables at balance date are translated at exchange rates at balance date.
   8. Conferences
      Expenditure incurred before the financial year end relating to any future conference is included in the balance sheet as a prepayment or deferred revenue to be expensed or earned in the accounts of the year in which the respective conference is held.
   9. Leased non-current assets
      A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets (finance leases), and operating leases under which the lessor effectively retains all such risks and benefits.

      Where a non-current asset is acquired by means of a finance lease, the minimum lease payments are discounted at the interest rate implicit in the lease. The discounted amount is established as a non-current asset at the beginning of the lease term and amortised on a straight line basis over its expected economic life. A corresponding liability is also established and each lease payment is allocated between the principal component and the interest expense.

   10. Redeemable vouchers
       The Association is responsible for controlling funds raised by way of the issue of vouchers which are redeemable to the holder on presentation to the Association. Funds received from the issue of redeemable vouchers are placed in interest-bearing deposit accounts or other interest-bearing marketable securities.
   11. Cash
       For purpose of the statement of cashflows, cash includes deposit at call which are readily convertible to cash on hand and which are used in the cash management function on a day-to-day basis, net of outstanding overdrafts. Because of the nature of cash held on deposit to redeem vouchers, cash included in the voucher fund investment does not meet the definition of cash.
   12. Comparative figures
       Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.