✨ Financial Statements Notes
Bay of Plenty Community Trust Incorporated
Notes to the financial statements (continued)
3 Significant accounting policies (continued)
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Trust and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is recognised in profit or loss on a diminishing value basis over the estimated useful lives of each part of an item of property, plant and equipment.
The depreciation rates for the current and comparative periods are:
- Furniture & fittings 11.4% to 33%
- Office equipment 26.4% to 80.4%
- Motor vehicle 30%
Depreciation methods, useful lives and residual values are reassessed at the reporting date.
(e) Impairment
The carrying amounts of the Trust’s assets are reviewed at each reporting date to determine whether there is any indication of impairment.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses directly reduce the carrying amount of assets and are recognised in profit or loss.
(i) Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For financial assets carried at amortised costs, 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 original effective interest rate.
The carrying amount of the financial assets is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of a provision. When a trade receivable is uncollectible, it is written off against the provision. Subsequent recoveries of amounts previously written off are credited against the provision. Changes in the carrying amount of the provision are recognised in profit or loss.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
(ii) Non-financial assets
The carrying amounts of the Trust’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
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NZ Gazette 2013, No 110
✨ LLM interpretation of page content
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Bay of Plenty Community Trust Incorporated Financial Statements
(continued from previous page)
💰 Finance & Revenue17 June 2013
Financial Statements, Community Trusts, Bay of Plenty, Accounting Policies, Depreciation, Impairment, Financial Assets, Non-Financial Assets