Te pŪrongo 2012
value through the surplus or deficit. The new standard is
required to be adopted for the year ended 31 December
2016. However, as a new Accounting Standards
Framework will apply before this date, there is no
certainty when an equivalent standard to NZ IFRS 9 will
be applied by public benefit entities.
The Minister of Commerce has approved a new
Accounting Standards Framework (Incorporating a Tier
Strategy) developed by the External Reporting Board
(XRB). Under this Accounting Standards Framework, Te
Wānanga o Aotearoa is classified as a Tier 1 reporting
entity and it will be required to apply full Public Benefit
Entity Accounting Standards (PAS). These standards are
being developed by the XRB and are mainly based on
current International Public Sector Accounting Standards.
The effective date for the new standards for public sector
entities is expected to be for reporting periods beginning
on or after 1 July 2014. This means Te Wānanga o
Aotearoa expects to transition to the new standards in
preparing its 31 December 2015 financial statements.
As the PAS are still under development, Te Wānanga o
Aotearoa is unable to assess the implications of the new
Accounting Standards Framework at this time.
Due to the change in the Accounting Standards
Framework for public benefit entities, it is expected
that all new NZ IFRS and amendments to existing NZ
IRFS will not be applicable to public beneift entities.
Therefore, the XRB has effectively frozen the financial
reporting requirements for public benefit entites up until
the new Accounting Standards Framework is effective.
Accordingly, no disclosure has been made about new or
amended NZ IFRS that exclude public benefit entities
from their scope.
Significant Accounting Policies
1. Basis of consolidation
The purchase method is used to prepare the
consolidated financial statements, which involves adding
together like items of assets, liabilities, equity, income
and expenses on a line-by-line basis. All significant intra-
group balances, transactions, income and expenses are
eliminated on consolidation.
Subsidiaries
Te Wānanga o Aotearoa consolidates in the group
financial statements all entities where Te Wānanga o
Aotearoa has the capacity to control their financing and
operating policies so as to obtain benefits from the
activities of those entities. This power exists where
Te Wānanga o Aotearoa controls the majority voting
power on the governing body or where such policies
have been irreversibly predetermined by Te Wānanga o
Aotearoa or where the determination of such policies is
unable to materially impact the level of potential
ownership benefits that arise from the activities
of the subsidiary.
Investments in subsidiaries are carried at cost in
the parent entity financial statements of Te Wānanga
o Aotearoa.
2. Foreign currency translation
Transactions in foreign currencies are initially recorded
in the functional currency at the exchange rates
ruling at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are
translated at the rate of exchange ruling at the balance
sheet date.
Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated
using the exchange rate as at the date of the
initial transaction.
Non-monetary items measured at fair value in
a foreign currency are translated using the
exchange rates at the date when the fair value
was determined.
3. Property, plant and equipment
Property, plant and equipment asset classes consist of
land and buildings, leasehold improvements, equipment,
computers, furniture and fittings, motor vehicles, waka,
library books and artwork.
The measurement bases used for determining
the gross carrying amount for each class of assets is
as follows:
• Land and buildings are measured at cost or
valuation less subsequent accumulated depreciation
on buildings and subsequent accumulated
impairment losses.
Statement of accounting policies (continued)
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