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A recent annual report of the City of Darwin Council did not include library books on the statement of financial position, notwithstanding the existence of

A recent annual report of the City of Darwin Council did not include library books on the statement of financial position, notwithstanding the existence of a substantial library collection. The City of Darwin Councils accounting policy for library books is to expense them at the time of acquisition. A note in the annual report reveals that in applying this policy the council considered the following factors: As soon as the book is purchased its fair value is minimal compared with its cost. The acquisition costs of individual books are below the councils capitalisation policy. The useful life of a book is variable and indeterminable, making depreciation difficult. Required Critically evaluate the councils accounting policy for its library collection. Suggest an alternative accounting policy or supplemental information that could be reported, if appropriate. Maximum 400 words

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