✨ Financial Statements Notes
Notes to the financial statements
Significant accounting policies (continued)
(c) Financial instruments (continued)
(i) Derivative financial instruments
The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.
Derivative financial instruments are recognised initially at fair value and transaction costs are expensed immediately. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The gain or loss on re-measurement to fair value is recognised immediately in profit or loss.
(d) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is recognised in profit or loss on a diminishing value (d.v.) basis over the estimated useful lives of each part of an item of plant and equipment.
The depreciation rates for the current and comparative periods are as follows:
Depreciation methods, useful lives and residual values are reassessed at the reporting date.
- Office furniture & equipment 12 – 48% d.v.
(e) Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both. Investment property is measured at fair value with any change therein recognised in profit or loss.
(f) Impairment
The carrying amounts of the Group’s assets are reviewed at each balance date to determine whether there is any indication of impairment.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses directly reduce the carrying amount of assets and are recognised in the Income Statement.
(i) Impairment of debt instruments and receivables
The recoverable amount of the Group’s receivables carried at amortised cost is calculated as the present value of estimated future cashflows, discounted to the original effective interest rate (i.e. the effective interest rate computed at initial recognition of these financial assets). Receivables with a short duration are not discounted.
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NZ Gazette 2010, No 103
✨ LLM interpretation of page content
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Notes to the financial statements
(continued from previous page)
💰 Finance & RevenueAccounting policies, Financial statements, Consolidation, Foreign currency, Financial instruments, Property, Plant and Equipment, Depreciation, Investment property, Impairment