Tainui Group Holdings
Annual Report
2013
55
external independent valuers, less subsequent depreciation. Any accumulated depreciation at the date of
revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the
revalued amount of the asset. Land at cost, hotels, development properties, vehicles, equipment, fixtures and
fittings are stated at historical cost less depreciation and impairment. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the
statement of comprehensive income during the financial period in which they are incurred.
Increases in the carrying amounts arising on revaluation of farm and other properties are credited to the
revaluation reserve in Shareholders’ equity. To the extent that the increase reverses a revaluation decrease
previously recognised in the statement of comprehensive income, the increase is first recognised in statement
of comprehensive income. Decreases that reverse previous increases of the same asset are first charged
against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset;
all other decreases are charged to the statement of comprehensive income.
Development property and land is not depreciated. Depreciation on other assets is calculated using the straight
line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful
lives. Estimated useful lives are as follows:
Computers
2 ‑ 6 years
Farm (buildings)
50 years
Furniture and fittings and office equipment
1 ‑ 17 years
Hotel (other assets)
3 ‑ 33 years
Other building
100 years
Plant and equipment
1 ‑ 14 years
Vehicles
2 ‑ 11 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in the statement of comprehensive income. When revalued assets are sold, it is Group policy to transfer the
amounts included in revaluation reserves in respect of those assets to retained earnings.
2.17 Investment properties
Investment properties include properties held to earn rental income, and/or for capital appreciation as well as
investment properties under construction. A property is also classified as an investment property if it does not
have an operating lease in place, but is held with the intention of attaining an operating lease.
Investment properties are initially recognised at cost, including transaction costs. Subsequent to initial
recognition, investment properties are carried at fair value, representing open‑market value determined
annually by external valuers. Changes in fair value are recorded in the statement of comprehensive income.
Where a property interest is held under an operating lease, and is classified as an investment property, the
property is recognised at the lower of fair value of the property and the present value of the minimum lease
payments, with an equivalent amount being recognised as a liability. Subsequent to initial recognition, the asset
and liability are measured at fair value with changes in fair value recognised in profit or loss.
2.18 Impairment of non‑financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised
when 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.
Impairment losses are recognised first against the revaluation reserves in respect of the impaired asset, and
second as an expense in the statement of comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is
increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying
