4 AUGUST 2014

NEW ZEALAND GAZETTE, No. 86

2417

EASTERN AND CENTRAL COMMUNITY TRUST INC

c) Donations
Donations are recognised as a liability of the Trust when they are approved by Trustees and notified to applicants notwithstanding that the applicants may still have to fulfil some conditions. Donations no longer required, or not fully utilised by donation recipients, are shown separately as donations written back.

d) Revenue
Dividends are recognised as income on the date that the Trust’s right to secure payment is established and recorded net of any imputation tax credits. Interest income is recognised on a time proportion basis using the effective interest method.

e) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash in banks, short term deposits and other highly liquid investments inclusive of accrued interest at balance date that are readily convertible into cash and which are subject to an insignificant risk of changes in value. The Trustees consider all bank deposits to be cash and cash equivalents, as they are available as cash for liquidity purposes. Deposits are sometimes longer than three months to obtain higher returns but are still considered cash and cash equivalents.

Cash and cash equivalents do not include cash or deposits held by the fund managers. Therefore, the Statement of Cash Flows does not reflect the cash flows within the fund managers’ portfolios.

f) Plant and Equipment
Items of plant and equipment are recorded at cost less accumulated depreciation and impairment losses. The Trust has one class of plant and equipment being office furniture and fittings.

g) Depreciation
Depreciation is recognised in the statement of comprehensive income on a straight line basis on all tangible fixed assets at rates calculated to allocate the assets’ cost less estimated residual value, over their estimated useful lives. Depreciation methods, useful lives and residual values are reassessed at the reporting date. The estimated life of assets is between 3 and 10 years.

h) Impairment on items of Plant and Equipment
The Trust’s plant and equipment assets are reviewed at each balance date to determine whether there is any objective evidence 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 the statement of comprehensive income.

i) Employee Benefits
Provision is made for salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably. Provisions in respect of employee entitlements expected to be settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.

j) GST
GST inclusive accounting has been adopted, as the Trust is not registered for GST.

k) Income Tax
The Trust is exempt from income tax under section CW52 of the Income Tax Act 2007.

l) Leases
Operating lease payments are recognised in the statement of comprehensive income on a straight line basis.

m) Cash Flows
The cash flow statement is prepared inclusive of GST, which is consistent with the method used in the statement of comprehensive income. The following are the definitions of the terms used in the cash flow statement: