3136 NEW ZEALAND GAZETTE No. 123

F. Grants maintenance reserve

While the trustees have adopted a long-term investment strategy, they accept that annual returns from investments are likely to fluctuate from year to year. In recognition of this, a grants maintenance reserve is maintained. In years when net income from investments is higher than the grant levels, surplus income will be transferred to this reserve. In years when there is insufficient income to sustain the level of grants, an appropriate amount will be transferred from the grants maintenance reserve to income.

G. Basis of recognising components of the financial statements

The following general accounting policies are adopted:

Assets

A transaction results in an asset being recognised in the statement of financial position when it will probably give rise to ongoing benefits for the Group and those benefits can be measured with reliability.

Liabilities

A transaction results in a liability being recognised in the statement of financial position when it will probably give rise to the need for the Group to sell down assets in the future, and those sell downs can be measured with reliability.

Revenue

Revenue is recognised in the statement of financial performance when a transaction gives rise to an increase in the value of the Group’s net assets, and that increase can be measured with reliability.

Expenses

An expense is recognised in the statement of financial performance when a transaction results in a decrease in the value of the Group’s net assets, and that decrease can be measured with reliability.

Classification of assets and liabilities between current and non-current

An amount is classified as current when it is expected to be settled or extinguished within one year of the date of the financial statements. All other amounts are classified as non-current.

H. Fixed assets

Fixed assets are initially stated at cost and then depreciated on a straight line basis. The estimated useful lives of fixed assets are as follows:

• Land: indefinite
• Buildings: 30-40 years
• Furniture and fittings: 3-15 years
• Office equipment: 3-8 years
• Motor vehicles: 5-8 years

I. Investments

Investments are stated at market value and reports realised and unrealised gains or losses on holding these investments in the Statement of Financial Performance. These gains or losses are shown in the Statement of Financial Performance as income from revaluation of investments.

J. Accounts receivable

Accounts receivable are stated at expected realisable value.

K. Grants

Grants are recognised when they are approved by the trustees. Unpaid grants are recorded as a liability.

L. Goods and services tax

The Group is not registered for goods and services tax. The financial statements are prepared using G.S.T. inclusive accounting.

M. Income taxation

The Group provides for income tax on its net income after adjusting for tax accounting differences and any beneficiaries’ income determinations made pursuant to section OB1 (226) of the Income Tax Act 1994.

N. Changes in accounting policies

The accounting policies have been consistently applied by the group and are consistent with those of the previous year. Some comparative information has been changed to conform with the presentation of information in the current year.

Notes to the Financial Statements

1. Investment income

2. Expenditure