✨ Financial Statements Notes
Notes to the Financial Statements
For the year ended 31 March 2010
3 Significant accounting policies (continued)
(f) Joint ventures operations
When a member of the Group participates in a joint venture arrangement, that member recognises its proportion of the individual assets, liabilities, revenues and expenses of the joint venture. The liabilities recognised include its share of those for which it is jointly liable.
(g) 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 Statement of comprehensive income.
(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 cash flows, discounted at 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.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than investment property, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognised in the statement of comprehensive income. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset.
In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(h) Employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
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NZ Gazette 2010, No 93
✨ LLM interpretation of page content
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Canterbury Community Trust Financial Statements Notes
(continued from previous page)
💰 Finance & Revenue5 July 2010
Financial Statements, Accounting Policies, Joint Ventures, Impairment, Employee Benefits, Canterbury Community Trust