✨ Financial Statements Notes
THE WAIKATO COMMUNITY TRUST INCORPORATED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2013
3.2 Investment Expenses
Investment expenses are presented in the Statement of Comprehensive Income and comprise transaction costs, fund management fees and investment advisory services.
3.3 Lease Expenses
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Payments under operating leases are recognised in the Statement of Comprehensive Income on a straight line basis over the term of the lease.
3.4 Donations
Donations are included in the Statement of Comprehensive Income when the donation has been approved by the Trustees, the recipient has been notified and when all significant conditions attached to the donation have been met.
3.5 Trust Funds and Reserves
3.5.1 Base Capital Value
Following the sale of the Trust shares in Trust Bank New Zealand Limited in April 1996, the Trustees agreed that the value of the Trust at that time should be maintained for the benefit of current and future generations living in the Waikato region. For this purpose, the Trustees agreed that $169,800,000 would be considered as the initial capital of the Trust and increased each year to reflect growth due to inflation and regional population growth.
The Base Capital Value is the initial capital adjusted for inflation and regional population growth on an annual basis. See Note 6 for the current value of the Trust’s Base Capital Value.
3.5.2 Investment Fluctuation Reserve
The Trustees have adopted an investment strategy with a targeted long term annual rate of return of 7.1% (2012: 7.5%) of the Trust portfolio value. Recognising that actual returns are likely to fluctuate from year to year, the Trust retains the variation from the target in an Investment Fluctuation Reserve, so that in years when investment returns are less than the target, sufficient funds are available to meet expenditure and make donations. If the Trust fund falls below the value that needs to be maintained for the benefit of current and future generations the levels of expenditure and donations are reviewed by the Trust.
3.5.3 Level of Donations
The current donation policy is to distribute annually as donations 4% (2012: 4%) of Base Capital Value, which is the value of the Trust fund that should be maintained for the benefit of current and future generations. The Trustees recognise that for a number of reasons this might not always be achievable and that there will be inevitable fluctuations between the donations distributed and the actual target.
3.6 Financial Liabilities
3.6.1 Accounts Payable and Accruals
Accounts payable and accruals are recorded at cost. They are non interest bearing and are normally settled on 30-day terms. Therefore the carrying value of accounts payable and accruals approximates their fair value.
Full NZ IFRS Financial Statements for the year ended 31 March 2013
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NZ Gazette 2013, No 109
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Financial Statements of The Waikato Community Trust Incorporated
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🏢 State Enterprises & Insurance11 July 2013
Financial statements, Community Trusts, Waikato, Income, Expenses, Distributions, Cash Flow, Accounting Policies, Revenue Recognition, Investment Income, Rental Income