✨ Financial Accounting Policies
3356 NEW ZEALAND GAZETTE, No. 127 14 AUGUST 2008
Critical Accounting Estimates and Judgements
The preparation of financial statements in conformity with NZ IFRS requires management of the use of certain critical accounting estimates, judgements and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgements. Actual results may differ from these estimates.
The estimates and judgements are reviewed by management on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised. In the process of applying the trust’s accounting policies, management have made judgements regarding whether or not discretionary donations are payable at year end or if discretionary donations are commitments at year end. This potentially has a significant effect on the amounts recognised in the financial statements. Donations payable are discretionary donations where there are no significant conditions attached to the donation at balance date or where the significant conditions attached to the donation have been met at balance date. Donations that are classified as commitments at year end are discretionary donation obligations at balance date that are reliant on additional funding or have other significant conditions attached to them to go ahead with a specified project. Management has also used market rates to determine the fair value of investments.
Standards, interpretations and amendments to published standards that are not yet effective
| Standard | Effective for annual reporting periods beginning on or after | Expected to be initially applied in the financial year ending |
|---|---|---|
| NZ IFRS 8 “Operating Segments” | 9 January 2009 | 31 March 2010 |
| NZ IAS-1 Presentation of Financial Statements – Revised Standard | 9 January 2009 | 31 March 2010 |
| Amendments to NZ IFRS-4 “Insurance Contracts” – The scope of insurance activities and differential reporting concessions | 9 January 2009 | 31 March 2010 |
| NZ IAS 1 | The revised NZ IAS 1 requires the presentation of all recognised income and expenses in one statement (a statement of comprehensive income) or in two statements (an income statement and a statement of comprehensive income), separately from owner changes in equity. The revised standard also includes other minor changes to presentation and disclosure requirements. |
Initial application of the following standards and interpretations is not expected to have any material impact to the financial report of the trust:
| Standard/Interpretation | Effective for annual reporting periods beginning on or after | Expected to be initially applied in the financial year ending |
|---|---|---|
| NZ IFRIC-12 “Service Concession Arrangements” | 1 January 2008 | 31 March 2009 |
| NZ IFRIC-13 “Customer Loyalty Programmes” | 1 July 2008 | 31 March 2010 |
| NZ IFRIC-14 “NZ IAS-19 The Limit on a defined Benefit Asset, Minimum Funding Requirements and their Interaction” | 1 January 2008 | 31 March 2009 |
| NZ IAS-23 “Borrowing Costs” – revised standard | 1 January 2009 | 31 March 2010 |
| NZ IFRS-2 “Share based Payment” – revised standard | 1 January 2009 | 31 March 2010 |
| NZ IFRS-3 “Business Combinations” – revised standard | 1 July 2009 | 31 March 2011 |
| NZ IAS-27 “Consolidated and Separate Financial Statements” – revised standard | 1 July 2009 | 31 March 2011 |
Specific Accounting Policies
The following specific accounting policies which materially affect the measurement of financial performance and the financial position have been applied:
(a) Revenue Recognition
Dividend and interest revenue
Dividend revenue from investments is recognised when the shareholders’ rights to receive payment have been established. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.
Rental revenue
Rents (net of any incentives) are recognised on a straight line basis over the lease term.
(b) Trade and Other Payables
Trade payables and other accounts payable are recognised at fair value when the trust becomes obliged to make future payments resulting from the purchase of goods and services. Subsequent to initial recognition, trade payables and other accounts payable are recorded at amortised cost. Given the nature of these liabilities, amortised cost equals their notional principal.
Donations payable are discretionary donations where there are no significant conditions attached or where the significant conditions attached to the donations have been met at balance date.
(c) Employee Entitlements
Provision is made for wages and salaries, including non monetary benefits, annual leave and accumulating sick leave when it is probable that settlement will be required and they are capable of being measured reliably.
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NZ Gazette 2008, No 127
✨ LLM interpretation of page content
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Notes To and Forming Part Of the Financial Statements for The Waikato Community Trust Incorporated
(continued from previous page)
💰 Finance & RevenueAccounting Policies, Revenue Recognition, Trade Payables, Employee Entitlements