140 FINANCIAL STATEMENTS When the outcome of the transaction involving the rendering of services cannot be estimated reliably, income shall be recognised only to the extent of the expenses recognised that are recoverable. Income received in advance has been deferred under trade and other payables and relates to services that will be delivered in the future. Members contributions are voluntary and are accountable when the funds are received. Rental income is calculated on an accrual basis in accordance with the essence of the applicable agreements recognised. Rental income is recognised on a straight-line basis over the rental period, even if payments are not made on a straightforward basis, or where payments are structured to increase in line with inflation. Other income for the group and organisation consists of donations, sundry income and cost recovery. Revenue and other income is calculated at the fair value of the consideration received or receivable and represents the receivables for services provided in the normal course of business, after deduction of value added tax. Interest is recognised, in profit or loss, using the effective interest rate method. Dividends are recognised, in profit or loss, when the organisation's right to receive payment has been established, and is shown as other income. 2.6 INVESTMENT PROPERTY Investment property is land and buildings held to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes; or for sale in the ordinary course of business. Investment property is initially measured at cost and subsequently at fair value with changes in fair value recognised in profit or loss. Cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If the fair value of investment property cannot be measured reliably without undue cost or effort, then it is measured at cost less accumulated depreciation and accumulated impairment. The group and organisation accounts for investment property as property, plant and equipment using the cost - depreciation - impairment model. 2.7 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are tangible assets which the organisation holds for its own use or for rental to others and which are expected to be used for more than one period. Property, plant and equipment also include investment property for which fair value cannot be determined without undue cost or effort on an ongoing basis. An item of property, plant and equipment is recognised as an asset when it is probable that future economic benefits associated with the item will flow to the organisation, and the cost of the item can be measured reliably. Property, plant and equipment is initially measured at cost. Cost includes cost incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. The initial estimate of the costs of dismantling and removing an asset and restoring the site on which it is located is also included in the cost of property, plant and equipment, when such dismantling, removal and restoration is obligatory. Expenditure incurred subsequently for major services, additions to or replacements of parts of property, plant and equipment are capitalised if it is probable that future economic benefits associated with the expenditure will flow to the organisation and the cost can be measured reliably. Day to day servicing costs are included in profit or loss in the period in which they are incurred. Property, plant and equipment is subsequently stated at cost less accumulated depreciation and any accumulated impairment losses, except for land which is stated at cost less any accumulated impairment losses. Land is not depreciated. Depreciation of an asset commences when the asset is available for use as intended by management.
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