Notes to the Financial Statements
continued
52
(a) Hotel income
Revenue from hotels comprises amounts earned in respect of services, facilities and goods supplied. Any
revenue not recognised, but received by the reporting date, is treated as deposits in advance, and shown as a
liability in the statement of financial position.
(b) Rental income
Rental income is recognised on a straight line basis over the lease term. Lease incentives which are offered
to tenants as an inducement to enter into non‑cancellable operating leases are recognised as current
prepayments and non‑current lease fitout contributions and are subsequently amortised over the term of the
lease as a reduction of rental income.
(c) Sales of goods
Sales of goods are recognised when the Group has transferred the significant risks and rewards of ownership of
the goods sold. For sections, recognition is on the sale contract becoming unconditional and the title passing.
The recorded revenue is the gross amount of the sale.
(d) Quota lease income
Quota lease income is recognised on a straight line basis over the lease term.
(e) Dairy income
Dairy income is recognised when the Group has transferred the significant risks and rewards of ownership of
the goods sold.
(f) Interest income
Interest income is recognised on a time‑proportion basis using the effective interest method. When a
receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated
future cash flow discounted at original effective interest rate of the instrument, and continues unwinding the
discount as interest income. Interest income on impaired loans is recognised using the rate of interest used to
discount the future cash flows for the purpose of measuring the impairment loss.
(g) Dividend income
Dividend income is recognised when the right to receive payment is established.
(h) Emission Trading Scheme allocation
Emission Trading Scheme allocation is assistance provided by the Government in the form of transfers of
resources to the Group in return for past or future compliance with certain conditions relating to operating
activities of the Group. The Group was eligible for and has received units under the New Zealand Emission
Trading Scheme as part of the fisheries allocation for quota owned. The fair value of units received is
recognised in the statement of comprehensive income on allocation by the Government to the Group.
2.6 Employee benefits
Liabilities are recognised for benefits accruing to employees in respect of wages and salaries, annual leave, and
sick leave where it is probable that settlement will be required and they are capable of being measured reliably.
Liabilities in respect of employee benefits expected to be settled within 12 months, are measured at their
nominal values using the remuneration rate expected to apply at the time of settlement.
Liabilities in respect of employee benefits which are not expected to be settled within 12 months are measured
at the present value of the estimated future cash outflows to be made by the Group in respect of services
provided by employees up to reporting date.
The Group recognises a liability and an expense for bonuses based on a formula that takes into consideration
the achievements of agreed key performance indicators, including the achievement of financial budget targets.
The Group recognises a provision where contractually obliged or where there is a past practice that has created
a constructive obligation.
2.7 Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from the
lessor) are charged to the statement of comprehensive income on a straight‑line basis over the period of the lease.
Property interests held by a lessee under an operating lease are recognised as part of the carrying amount of
the investment property with a corresponding liability at fair value through profit or loss being recorded.
Note 2.5 continued
