Tainui Group Holdings
Annual Report
2013
81
recognised initially at its fair value and in the case of a financial asset or liability measured at amortised cost
includes transaction costs that are directly attributable to the acquisition or issue of the instrument.
Financial assets and liabilities recorded at fair value through the profit and loss are designated at initial
recognition.
Financial assets and liabilities measured at amortised cost
Financial assets and liabilities measured at amortised cost are non-derivative financial assets and liabilities
which meet the following criteria:
a) held within a business model whose objective is to hold an instrument in order to collect contractual cash
flows; and
b) the contractual terms of the instrument gives rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
A gain or loss on a financial asset and liability that is measured at amortised cost and is not part of a hedging
relationship shall be recognised in profit and loss when the instrument is derecognised, impaired or reclassified
and through the amortisation process.
Trade and other receivables are classified as financial assets measured at amortised cost. Trade and other
payables and debt instruments are classified as financial liabilities measured at amortised cost.
Financial assets and liabilities measured at fair value through profit or loss
Financial assets and liabilities are measured at fair value unless measured at amortised cost. At initial
recognition, an entity may make an irrevocable election to present in other comprehensive income subsequent
changes in the fair value of an investment in an equity instrument within the scope of this NZ IFRS that is
not held for trading. If an entity makes this election, it shall recognise in profit or loss dividends from that
investment when the entity’s right to receive payment of the dividend is established in accordance with NZ
IAS 18 ‘Revenue’. An entity may also at initial recognition, designate an instrument as measured at fair value
through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency
that would otherwise arise from measuring the instruments or recognising gains and losses on them on
different bases.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not
active (and for unlisted securities), the Company establishes fair value by using valuation techniques. These
include the use of recent arm’s length transaction pricing models refined to reflect the Company’s specific
circumstances.
A gain or loss on a financial asset or liability that is measured at fair value and is not part of a hedging
relationship shall be recognised in profit and loss unless the financial asset is an investment in an equity
instrument and the entity has made an irrevocable election to present gains and losses on that investment in
other comprehensive income.
Financial assets are de-recognised when the rights to receive cash flows from the financial assets have expired
or have been transferred and the Company has transferred substantially all risks and rewards of ownership.
Financial liabilities are de-recognised if the Group’s obligations specified in the contract expire or are discharged
or cancelled.
2.4 Revenue recognition
Revenue is comprised of the fair value for the sale of goods and services, net of goods and services tax (GST),
rebates and discounts. Revenue is recognised as follows:
(a) Financial assets are classified as revenue on initial recognition; and
(b) Dividend income is recognised when the right to receive payment is established.
2.5 Dividends
Dividend distribution to the Company Shareholder is recognised as a liability in the Company’s financial
statements in the period in which the dividends are approved by the Directors and notified to the Company’s
Shareholder.
Provision is made for the amount of any dividend declared on or before the end of the financial year but not
distributed at balance date.
2.6 Current income tax
The Inland Revenue Department approved the Company as a Maaori Authority for the purposes of the Income
Tax Act 1994. Accordingly, income tax is payable at a rate of 17.5%. The company currently has $1.9m in its
