NEW ZEALAND GAZETTE, No. 172
9 NOVEMBER 2011

ASB COMMUNITY TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2011

For investments that are actively traded in organised financial markets, fair value is determined by reference to exchange quoted market bid prices at the close of business on the Statement of Financial Position date. As these are quoted prices (unadjusted) in active markets for identical assets, they fall within Level 1 of the fair value hierarchy within NZ IFRS 7 Financial Instruments: Disclosures that reflect the significance of the inputs used in making measurements.

All realised and unrealised gains or losses on investments are recognised in the Statements of Comprehensive Income.

Investments in pooled funds are valued at the unit exit price determined by the Fund Manager at the close of business on the Statement of Financial Position date. This is based either on:

• quoted prices (unadjusted) in active markets for the underlying fund assets, and fall within Level 1 of NZ IFRS 7, fair value hierarchy, or
• inputs other than quoted prices included within Level 1 that are observable for the asset, either directly (ie as prices) or indirectly (ie derived from prices), and fall within Level 2 of NZ IFRS 7, fair value hierarchy, or
• inputs for the asset that are not based on observable market data (unobservable inputs), and fall within Level 3 of NZ IFRS 7, fair value hierarchy.

Investment transactions are recorded by Fund Managers on a transaction date basis.

Financial assets are managed and have their performance evaluated on a fair value basis in accordance with risk management and investment strategies of the Group, as disclosed in Note 9.

The Group uses derivative financial instruments, forward exchange contracts, to reduce exposure to fluctuations in foreign currency denominated assets and liabilities. Forward exchange contracts are entered into to hedge foreign currency denominated assets. Derivatives are not held or issued for trading purposes. However derivatives not qualifying for hedge accounting purposes are accounted for as trading instruments. Derivative financial instruments are recognised initially at fair value and transactional 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 the Statements of Comprehensive Income.

The Group derecognises a financial asset when and only when the contractual rights to cash flows from the financial asset expire.

Sundry Accounts Receivable

Sundry Accounts Receivable consists of receivables due from third parties, prepayments and preliminary expenses incurred on behalf of a limited partnership to be incorporated to own and operate an integrated grants management system. A group of Community Trusts will be partners in the limited partnership. These are initially recognised at fair value and subsequently measured at amortised cost, less any impairment.

Financial Liabilities

All liabilities that are financial instruments are recognised in the Statements of Financial Position.

Financial liabilities comprising Sundry Accounts Payable, Loans from Community Trusts, and the subsidiary company current account are stated at amortised cost.