✨ Financial Statements Notes
Notes to the financial statements (continued)
Significant accounting policies (continued)
3 Significant accounting policies
(a) Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the functional currency at exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date.
(b) Financial instruments
(i) Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, and trade and other payables.
Instruments at fair value through profit or loss
An instrument is classified as at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through the statement of comprehensive income if the Trust manages such investments and makes purchase and sale decisions based on their fair value. Upon initial recognition, attributable transaction costs are recognised in the statement of comprehensive income when incurred. Subsequent to initial recognition, financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in the statement of comprehensive income.
Purchases and sales of instruments are recognised on the trade date or the date on which the trust commits to purchase or sell the asset.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the trust provides money to an entity with no intention of selling the receivable.
Loans and receivables are carried at amortised cost using the effective interest method.
Trade and other payables
Trade and other payables are stated at cost.
(ii) Derivative financial instruments
The Trust uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from investment activities. In accordance with its policy, the Trust 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 remeasurement to fair value is recognised immediately in the statement of comprehensive income.
(c) 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.
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NZ Gazette 2011, No 104
✨ LLM interpretation of page content
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BayTrust Financial Statements
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🏢 State Enterprises & InsuranceFinancial Statements, Revenue, Expenses, Equity, Grants, BayTrust, Cashflows, Operating Activities, Investing Activities