27 SEPTEMBER                THE NEW ZEALAND GAZETTE                4125

Current Assets
Cash resources and short term
investment ................................................ 20,154,351 16,172,285
Interest due and accrued on
investments ................................................ 1,802,924 1,598,785
Sundry debtors ............................................. 272,399 213,356
Remittances in transit ..................................... 3,078,539 4,148,637
Total Current Assets ..................................... 25,308,213 22,133,063

Investments
4 New Zealand Government stock ........................... 88,646,383 65,145,754
Local authority securities ................................. 4,803,027 5,266,765
Mortgages and term loans ................................. 87,049,141 79,787,421
Personal loans ........................................... 3,593,131 2,372,474
Overdrafts ............................................... 4,879,764 3,586,716
Northern Trustee ....................................... 337,086 187,435
5 Computerbank Ltd. ...................................... 761,304 599,856
Other investments ........................................
Total Investments ........................................ 190,069,836 156,920,421
Fixed Assets ............................................. 9,070,838 6,527,363
Total Assets ........................................... $224,448,887 $185,580,847

C. A. McCULLOCH, President.

V. J. PETRIE, General Manager.

The notes and statements of changes in financial position on pages
4215–4126 form part of these financial statements.

STATEMENT OF CHANGES IN FINANCIAL POSITION

Add Reduction in Current Liabilities
| Increase in interest accrued on depositors' funds | (228,046) | (512,966) |
| Increase in provision for donations | (10,000) | (20,000) |
| Reduction in sundry creditors | 616,312 | (355,671) |
| Reduction in provision for deferred maintenance | 64,923 | 35,077 |
| | 443,189 | (1,053,560) |

Less Increase in Provision for Taxation
| Reduction in current taxation | (277,450) | 379,844 |
| Increase in deferred taxation | 353,861 | 455,461 |
| | 76,411 | 825,305 |

Increase in working capital as above ......................... $3,541,928 $5,837,245

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 1984

1. Statement of Accounting Policies

General Accounting Policies

The measurement base adopted in the preparation of these accounts is that of historical cost modified by the revaluation of land and buildings. Reliance has been placed on the fact that the Trusteebank Southland is a going concern. Accrual accounting is used in the matching of expenses and revenue.

Particular Accounting Policies

Recognition of Income

Income reported in the profit statement was earned in the current income year and interest includes the amortisation of premiums and discounts on the purchase of Government and Local Authority Stock.

Interest earned from personal loans is taken into account using the rule of 78 method of allocation.

Depreciation

Fixed assets, except the data processing equipment, are depreciated by applying rates approved by the Inland Revenue Department including first year allowance where applicable.

Data processing equipment is depreciated on a straight-line basis at rates estimated to write off the cost of the assets over their useful life.

The difference between the policy adopted and the straight-line basis for all assets is not considered to be material.

Principal rates used are—

| Building | 1% to 2% cost price |
| Furniture, fittings and equipment | 10% to 20% diminishing value |
| Data processing equipment | 14% cost price. |

As the revaluation of buildings was effected as at 31 March 1984, depreciation has been calculated on the cost of the assets at 31 March 1983 and subsequent additions during the year.

Valuation of Assets

All current assets and investments are shown at cost with the exception of Government and Local Authority Stock. Government and Local Authority Stock is valued at cost, adjusted by the amortisation of premiums or discounts on purchases, calculated on a yield basis, over the terms of the stock.

Taxation

Provision for taxation against profits is the estimated expense relating to the results for the year.

Provision for deferred taxation relates to timing differences on accrued interest income, amortisation of premiums, depreciation and profits and losses on the sale of New Zealand Government Stock.

Changes in Accounting Policies

1. Land and buildings which were previously shown as cost (less depreciation for buildings) have been revalued this year to an independent valuation by a registered public valuer as at 31 March 1984.

The increase in the value of land and buildings on the book value at 31 March 1984 has been shown as part of Reserve Funds.

2. Provision for Deferred Maintenance

The provision of $164,923 at 31 March 1983 to cover part of the cost of the redevelopment of the Don Street frontage of the Invercargill Branch has been credited against expenses as the redevelopment is now complete.

A provision of $100,000 has been made in this year's Profit and Loss Account for the upgrading of the Gore premises which will be completed in the 1985 financial year.

3. Deferred Taxation

Deferred Taxation arises because of timing differences in respect of the increase in interest accrued $153,664, the sale of Government Stock $100,253, amortisation of premiums $93,562 and depreciation $6,382.

4. Government Stock

New Zealand Government Stock at 31 March 1984—

New Zealand Government Stock is held pursuant to the ratio requirements of the Trustee Banks Act 1984.

The estimated market value of Government Stock at 31 March 1984 was $89,345,806. (1983 $58,608,671)

5. Equity Accounting

Trusteebank Southland's share of the equity profit to the year ended 31 May 1983 is calculated as follows—