Te pŪrongo 2012
consistent with the accounting policies adopted
by Te Mana Whakahaere for the preparation of the
financial statements.
20. Key judgements, estimates and assumptions
The following items have been included in the financial
statements as a result of key judgements or estimates.
Operating lease commitments
Te Wānanga o Aotearoa has entered into commercial
property leases on its property portfolio. Te Wānanga
o Aotearoa has determined that it retains all significant
risks and rewards of ownership on these properties and
has therefore classified the leases as operating leases.
Impairment of non-financial assets
Te Wānanga o Aotearoa assesses impairment of all assets
at each reporting date by evaluating conditions specific
to Te Wānanga o Aotearoa and to the particular asset
that may lead to impairment. These include programme
performance, technology, economic and political
environments, and future programme expectations. If an
impairment trigger exists, the recoverable amount of the
asset is determined. Management does not consider that
the triggers for impairment testing have been significant
and, as such, these assets have not been tested for
impairment in this financial period.
Classification of assets and liabilities as held for sale
Te Wānanga o Aotearoa classifies assets and liabilities as
held for sale when its carrying amount will be recovered
through a sale transaction. The assets and liabilities
must be available for immediate sale and Te Wānanga o
Aotearoa must be committed to selling the asset either
through the entering into a contractual sale agreement or
the activation and commitment to a programme to locate
a buyer and dispose of the assets and liabilities.
Distinction between revenue and capital contribution
Most Crown funding received is operational in nature.
Thus it is provided by the Crown under the authority of
an expense appropriation and is recognised as revenue.
Where funding is received from the Crown under
the authority of a capital appropriation, Te Wānanga
o Aotearoa accounts for the funding as a capital
contribution directly in equity. Information about
capital contributions recognised in equity is disclosed
in note 16.
Early childhood centre grant
Te Wānanga o Aotearoa received a grant from the Crown
for the construction of a new early childhood learning
centre facility. The grant has a number of conditions
attached which require all or part of the grant to be
repaid in the event the conditions are not met. NZ IFRS
does not provide authoritative support on accounting for
government grants for public benefit entities because
public benefit entities are not permitted to apply the
recognition and measurement requirements of NZ IAS
20 Accounting for Government Grants and Disclosure
of Government Assistance. Te Wānanga o Aotearoa has
considered the liability definition in the New Zealand
Framework and in applying its judgement has recognised
the grant as revenue because management is committed
to satisfying the remaining grant conditions. It is
therefore not considered probable that Te Wānanga o
Aotearoa will be required to repay all or part of the grant
to the Crown.
Capitalised programme development costs
Development costs are only capitalised by Te Wānanga o
Aotearoa when it can be demonstrated that the technical
feasibility of completing the intangible
asset is valid so that the asset will be available for use
or sale and that the programmes will provide positive
cash flows.
Estimation of useful lives of assets
The estimation of the useful lives of assets has been
based on historical experience as well as manufacturers’
warranties (for plant and equipment), lease terms (for
leased equipment) and turnover policies (for motor
vehicles). In addition, the condition of each asset is
assessed at least once per year and considered against
the remaining useful life. Adjustments to useful lives are
made when considered necessary.
Property revaluations
Note 11 provides information about the estimates and
assumptions exercised in the measurement of revalued
land and buildings.
Statement of accounting policies (continued)
86
