9. Fitout assets

9.1 Fitout acquisition

Typically, the Department of Energy and Public Works (EPW) funds office fitouts through:

• lease incentives within lease agreements between EPW and lessors
• the Office Accommodation Program (OAP)
• specific capital funding from the Treasury Consolidated Fund.

As non-specialised commercial office accommodation supplied by EPW to agencies are exempt from AASB16, all fitouts funded by EPW (i.e. through lease incentives, the Office Accommodation Program or specific capital funding from the Consolidated Fund) will be recognised in EPW's financial statements in accordance with non-current asset policies for the Queensland public sector (NCAPs).

If an agency funds its own office alterations (in consultation with QGAO—refer to Section 7), these will be recognised in the agency's financial statements in accordance with NCAPs.

9.2 Fitout removal

In the case of machinery-of-government relocations or other whole-of-government projects involving multiple relocations, agencies are generally required to leave existing furniture and fitout in the building that they are relocating from, and will be provided with replacement items of equal quality in their new building.

All fitouts funded by EPW (i.e. through lease incentives, the OAP or specific capital funding from the Consolidated Fund) will be recognised in EPW's financial statements in accordance with NCAPs. Therefore, agencies are only required to consider the impact of relocations when they have internally funded office alterations as described in Section 9.1 above.

At the time of relocation, any office alterations recognised by the agency in accordance with Section 9.1 above must be appropriately accounted for as follows:

• If the alterations will be removed, the agency derecognises the asset in accordance with NCAPs
• If the alterations will be retained, they are to be transferred to the incoming agency for no consideration in 1 of 2 ways:
  • the transferor recognises a loss on disposal and the transferee recognises a gain on acquisition in accordance with NCAPs
    or
  • the transfer is accounted for by both entities through equity if the criteria in Section 4F.3 of Financial Reporting Requirements for Queensland Government Agencies are met.
• If the alterations will be retained but the incoming agency is unknown, the agency derecognises the asset in accordance with NCAPs.

9.3 Fitout insurance

Agencies will be responsible for paying the excess amount on any insurance claims and for managing the claim process through QGIF. EPW may manage the claim on behalf of occupying agency in the event of multiple claims across a single site.