✨ Financial Statements Notes
3258 NEW ZEALAND GAZETTE, No. 117 3 AUGUST 2011
TSB Community Trust
Notes to the Financial Statements
For the year ended 31 March 2011
- Statement of Accounting Policies (continued)
Financial Instruments (continued)
Subsequent to initial recognition, investments in subsidiaries are measured at cost.
At balance date the Trust had the following categories of financial assets.
i) Held-to-Maturity
Bonds with fixed or determinable payments and fixed maturity dates that the Trust has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Government bonds, fixed rate notes and floating rate bonds are designated as held-to-maturity investments and are recorded at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective interest basis.
ii) Loans and Receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate. Bank deposits of more than 3 months duration are included in this classification.
Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period to the net carrying amount of the financial asset.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.
Next Page →
NZ Gazette 2011, No 117
✨ LLM interpretation of page content
💰
TSB Community Trust Financial Statements
(continued from previous page)
💰 Finance & Revenue5 July 2011
Financial Statements, Accounting Policies, Community Trusts, TSB