Financial Statements of Waikato River Clean-Up Trust
for the period ended 30 June 2012
34
of completion is measured with reference to the project milestones.
iii) Interest
Interest income is recognised using the effective interest method.
d) Finance income and expenses
Finance income comprises interest income on funds invested, dividend income
and gains on the disposal of available-for-sale financial assets. Interest income is
recognised as it accrues, using the effective interest method. Dividend income is
recognised on the date that the Trust’s right to receive payment is established.
Finance expenses comprise interest expense on borrowings, unwinding of
discount on provisions, changes in the fair value of financial assets at fair value
through profit or loss and impairment losses recognised on financial assets
(except for trade receivables).
e) Grant expenditure
Grants are those grants awarded if the grant application meets the specified
criteria and are recognised as expenditure when an application that meets the
specified criteria for the grant has been approved by the Board and the approval
has been communicated to the applicant.
Grants under $50,000 are recognised as expenditure when they become payable
unless there is an obligation in the deed of fund for multiple year payments.
Where there are multiple year payments these have been recognised in
provisions.
Grants over $50,000 are not recognised as expenditure until milestone reporting
is received. Grants that are not recognised are recorded as contingent liabilities.
f) Property, plant and equipment
Property, plant, and equipment consists of the following asset classes:
office equipment. The assets classes are measured at cost, less accumulated
depreciation and impairment losses.
Additions
The cost of an item of property, plant, and equipment is recognised as an asset
only when it is probable that future economic benefits or service potential
associated with the item will flow to the Trust and the cost of the item can be
measured reliably.
In most instances, an item of property, plant, and equipment is initially
recognised at its cost. Where an asset is acquired at no cost, or for a nominal cost,
it is recognised at its fair value as at the date of acquisition.
Disposals
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount of the asset. Gains and losses on disposals are reported net
in the surplus or deficit. When revalued assets are sold, the amounts included in
revaluation reserves in respect of those assets are transferred to general funds.
Subsequent costs
Costs incurred subsequent to initial acquisition are capitalised only when it is
probable that future economic benefits or service potential associated with the
item will flow to the Trust and the cost of the item can be measured reliably.
The costs of day-to-day servicing of property, plant, and equipment are
recognised in the surplus or deficit as they are incurred.
Depreciation
Depreciation is provided on a straight-line basis on all property, plant, and
equipment other than land, at rates that will write-off the cost (or valuation) of
the assets to their estimated residual values over their useful lives. The useful
lives and associated depreciation rates of major classes of property, plant, and
equipment have been estimated as follows:
Office equipment
3 to 8 years
17.5%-40%