27 JUNE 2012 NEW ZEALAND GAZETTE, No. 72 2023

EASTERN AND CENTRAL COMMUNITY TRUST INC

ended 31 March 2013 sets out specific disclosures for entities that apply NZ IFRSs. These disclosures are relocated from NZ IFRSs to clarify that these disclosures are additional to those required by IFRSs. Adoption of the new rules will not affect any of the amounts recognised in the financial statements, but may simplify some of the Trust’s current disclosures. Adoption of this standard is not expected to have a material impact on the Fund’s financial statements.

NZ IFRS 13 Fair Value Measurement (effective for periods beginning on or after 1 January 2015 with initial application for the Trust being in the year ended 31 March 2016) consolidates fair value measurement guidance from across various IFRSs into a single standard, however does not change when fair value can or should be used. The impact on the financial performance as well as financial position, as a result of adoption of NZ IFRS 13, is still to be assessed. It is expected that the adoption of the standard will require additional disclosures related to fair value.

3. SIGNIFICANT ACCOUNTING POLICIES

The following are the particular accounting policies, which have a material affect on the measurement of results and financial position. They have been applied consistently to all periods presented in these financial statements except for changes to the Statement of Cash Flows as detailed in note 18.

a) Foreign Currency Transactions
Foreign currency balances are converted to NZD at the year end rate of exchange. Transactions completed during the year are converted at the rate applying at the date of the transaction. Any foreign exchange gain or loss on monetary items is included within the statement of comprehensive income as revenue.

b) Financial Instruments
The Trust classifies its financial instruments in the following categories: financial assets at fair value through profit or loss; loans and receivables; held to maturity financial assets; available for sale financial assets; financial liabilities at amortised cost. The classification depends on the nature of the instrument and the purpose for which the financial instruments were acquired. Management determines the classification of its financial instruments at initial recognition and re-evaluates this designation at every reporting date.

A financial instrument is recognised only when the Trust becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Trust’s contractual right to the cash flows from the financial assets expire or if the Trust transfers the financial assets to another party without retaining control or substantially all risks and rewards of the asset.

Purchases and sales of investments are recognised on trade date, the date on which the Trust commits to purchase or sell the asset.

Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in the profit or loss. Subsequent to initial recognition these instruments are measured as set out below.

Financial assets at fair value through profit or loss
Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the profit or loss in the period in which they arise. Financial assets held for trading and derivatives are classified as financial assets at fair value through profit or loss.

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 are stated at amortised cost using the effective interest rate method less accumulated impairment losses. Cash and cash equivalents and short term advances are classified as loans and receivables.