Waikato River Authority Annual Report
2012
33
reporting date for any indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
ii) Impairment of property, plant and equipment
Property, plant, and equipment and intangible assets that have a finite
useful life are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use.
Value in use is depreciated replacement cost for an asset where the future
economic benefits or service potential of the asset are not primarily
dependent on the asset’s ability to generate net cash inflows and where the
Trust would, if deprived of the asset, replace its remaining future economic
benefits or service potential.
If an asset’s carrying amount exceeds its recoverable amount, the asset
is impaired and the carrying amount is written-down to the recoverable
amount. For revalued assets, the impairment loss is recognised in other
comprehensive income to the extent that the impairment loss does not
exceed the amount in the revaluation reserve in equity for that class of asset.
Where that results in a debit balance in the revaluation reserve, the balance is
recognised in the surplus or deficit.
For assets not carried at a revalued amount, the total impairment loss is
recognised in the surplus or deficit.
The reversal of an impairment loss on a revalued asset is credited to other
comprehensive income and increases the asset revaluation reserve for that
class of asset. However, to the extent that an impairment loss for that class
of asset was previously recognised in the surplus or deficit, a reversal of the
impairment loss is also recognised in the surplus or deficit.
For assets not carried at a revalued amount, the reversal of an impairment
loss is recognised in the surplus or deficit.
c) Revenue
i) Government grants
Settlement grants received from the government are the primary source of
funding to the Trust. Government grants are recognised as revenue when
they become receivable unless there is an obligation to return the funds if
conditions of the grant are not met. If there is such a obligation, the grants are
initially recorded as grants received in advance and recognised as revenue
when conditions of the grant are satisfied.
Settlement grants are measured at the present value of the revenue expected
to be required to settle the obligation using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the obligation. The increase in the settlement grants due to the
passage of time is recognised in “finance income”.
Grants received from the government are the primary source of funding
to the Trust and are restricted for the purposes of the Trust meeting its
objectives as specified in the Waikato-Tainui Raupatu Claims (Waikato River)
Settlement Act 2010. Government grants are recognised as revenue when
they become receivable unless there is an obligation to return the funds
if conditions of the grant are not met. If there is such an obligation, the
grants are initially recorded as grants received in advance and recognised as
revenue when conditions of the grant are satisfied.
ii) Services
Revenue from services rendered is recognised in profit or loss in proportion
to the stage of completion of the transaction at the reporting date. The stage