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NEW ZEALAND GAZETTE, No. 126

2 NOVEMBER 2006

H. 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 sacrifice assets in the future and those sacrifices 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.

I. Property, Plant and Equipment (Parent)

Property, plant and equipment are initially stated at cost and then depreciated on a straight line basis. Land and buildings are stated at valuation as determined by an independent registered valuer. The basis of valuation of the land and buildings is highest and best use. 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

J. Property, Plant and Equipment (Group)

Property, plant and equipment are initially stated at cost and then depreciated using maximum rates approved for taxation purposes. The rates and method applied are as follows:

Furniture and fittings
11.4% – 18.0% Diminishing value

Office equipment
22.0% – 60.0% Diminishing value

Motor vehicles
7.5% Diminishing value

Other assets
48.0% Diminishing value

K. Investments With Fund Managers

Investments with fund managers are stated at market value and report 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.

L. Other Investments

Cash investments are stated at cost plus interest credited or accrued to balance date.

M. Accounts Receivable

Accounts receivable are stated at expected realisable value.

N. Rental payments

Invest South Limited Group leases its premises in addition to certain items of plant and equipment. Operating lease payments, where the lessors effectively retain substantially all the risks and benefits of ownership of the leased items, are included in the determination of the operating surplus/(deficit) in equal instalments over the lease term.

O. Debt Funding Advances

Invest South Limited (a subsidiary) has advanced monies to non-related entities as part of its core business activity. Interest is charged on these advances and accrued where necessary. The investments are recorded at expected realisable value.

P. Impairment

If the estimated recoverable amount of an asset is less than its carrying amount, the asset is written down to its estimated recoverable amount and an impairment loss is recognised in the statement of financial performance.

Q. Grants

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

R. Goods and Services Tax

The parent is not registered for goods and services tax. The parent financial statements are prepared using GST inclusive accounting. The subsidiary of Invest South Limited Group is registered for GST and all assets and liabilities have been stated exclusive of GST with the exception of receivables and payables which are stated inclusive of GST.

S. Income Taxation

The parent 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. However, with effect from 1 April