Investor Presentaiton

Department of Health Notes to the financial statements For the year ended on 30 June 2023 5.3 Right-of-use assets (continued) Initial recognition At the commencement date of the lease, the department recognises right-of-use assets that are measured at cost including the following: . the amount of the initial measurement of lease liability • any lease payments made at or before the commencement date less any lease incentives received • any initial direct costs . restoration costs, including dismantling and removing the underlying asset. This includes all leased assets other than investment property right-of-use assets, which are measured in accordance with AASB 140 'Investment Property'. The corresponding lease liabilities in relation to these right-of-use assets have been disclosed in note 7.2 'Lease liabilities'. The department has elected not to recognise right-of-use assets and lease liabilities for short-term leases (with a lease term of 12 months or less) and low value leases (with an underlying value of $5,000 or less). Lease payments associated with these leases are expensed on a straight-line basis over the lease term. Subsequent measurement The cost model is applied for subsequent measurement of right-of-use assets, requiring the asset to be carried at cost less any accumulated depreciation and accumulated impairment losses and adjusted for any re-measurement of lease liability. Depreciation and impairment of right-of-use assets Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the underlying assets. If ownership of the leased asset transfers to the department at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. Right-of-use assets are tested for impairment when an indication of impairment is identified. The policy in connection with testing for impairment is outlined in note 5.1.1 'Depreciation and impairment charge for the period'. Contents About us < 167 Significant issues Report on operations Agency performance Operational disclosures Key performance indicators Financial disclosures and compliance • Appendix

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