Te pŪrongo 2012
7. Inventories
Inventories held for distribution or consumption in the
provision of services that are not issued on a commercial
basis are measured at the lower of cost and net
realisable value. Where inventories are acquired at no
cost or for nominal consideration, the cost is the current
replacement cost at the date of acquisition.
The replacement cost of the economic benefits or service
potential of inventory held for distribution reflects any
obsolescence or any other impairment.
The cost of purchased inventory is determined
as follows:
• inventories held for resale – purchase cost is on a
weighted average cost
• materials and consumables to be utilised for
rendering of services – purchase cost is on a first-in,
first-out basis.
The write-down from cost to current replacement cost or
net realisable value is recognised in the surplus or deficit
in the period when the write-down occurs.
8. Debtors and other receivables
Tauira fees and other receivables are recognised and
carried at original receivable amount less any provision
for impairment.
A specific provision for impairment is made when
collection of the full amount is no longer probable. Bad
debts are written off when identified.
9. Cash and cash equivalents
Cash and cash equivalents in the statement of financial
position comprise cash at bank and in hand and short-
term deposits with an original maturity of three months
or less.
10. Creditors and other payables
Creditors and other payables are recorded at their
face value.
11. Provisions
A provision is recognised for future expenditure of
uncertain amount or timing when there is a present
obligation (either legal or constructive) as a result of
a past event, it is probable that an outflow of future
economic benefits will be required to settle the
obligation, and a reliable estimate can be made of the
amount of the obligation.
Provisions are measured at the present value of the
expenditures expected to be required to settle the
obligation using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the obligation. The increase in
the provision due to the passage of time is recognised as
an interest expense and is included in “finance costs”.
12. Employee entitlements
Short-term employee entitlements
Employee entitlements that Te Wānanga o Aotearoa
expects to be settled within 12 months of balance
date are measured at nominal values based on accrued
entitlements at current rates of pay. These include
salaries and wages accrued up to balance date, annual
leave earned, but not yet taken at balance date, and
sick leave.
Te Wānanga o Aotearoa recognises a liability for sick
leave to the extent that compensated absences in the
coming year are expected to be greater than the sick
leave entitlements earned in the coming year. The
amount is calculated based on the unused sick leave
entitlement that can be carried forward at balance date
to the extent Te Wānanga o Aotearoa anticipates it will
be used by staff to cover those future absences.
13. Superannuation schemes
Defined contribution schemes
Obligations for contributions to Kiwisaver are accounted
for as defined contribution superannuation schemes and
are recognised as an expense in the surplus or deficit
as incurred.
14. Leases
Leases where the lessor retains substantially all the risks
and benefits of ownership of the asset are classified
as operating leases. Initial direct costs incurred in
negotiating an operating lease are added to the carrying
amount of the leased asset and recognised over the
lease term on the same basis as the lease income.
Operating lease payments are recognised as an expense
in the surplus or deficit on a straight-line basis over the
lease term.
15. Revenue
Revenue is measured at the fair value of consideration
or receivable.
Government grants
Government grants are recognised as revenue
upon entitlement.
Other government grants
Funding is received from the Tertiary Education
Commission (TEC) in relation to costs expected to be
incurred by Te Wānanga o Aotearoa to complete specific
projects and organisational change objectives as
established and agreed between TEC and Te Wānanga
o Aotearoa. Revenue from these projects is recognised
based on the stage of the completion of the project.
The stage of completion is measured based on the
percentage of costs incurred to date compared to
the total estimated costs to complete the full project.
When funding is received in advance of the project
Statement
of
accounting policies (continued)
84
