54 TE PŪRONGO 2013
Significant Accounting Policies
1.Basis of consolidation
The group financial statements are prepared by adding
together like items of assets, liabilities, equity, income,
expenses and cashflows on a line-by-line basis. All significant
intra-group balances, transactions, income and expenses are
eliminated in full 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 base used for determining the gross
carrying amount for each class of assets is as follows:
• Buildings are measured at cost or valuation less
subsequent accumulated depreciation and impairment
losses.
• Land and Artwork is stated at cost or valuation and are not
depreciated.
• All other asset classes are stated at cost less accumulated
depreciation and impairment losses.
Depreciation
Depreciation is provided on a straight-line basis on all
property, plant and equipment other than land and artwork
at rates that will write off the cost (or valuation) of the assets
to their estimated residual values over their useful lives. The
useful lives and associated depreciation rates of major classes
of assets have been estimated as follows:
Buildings
10-50years
2%-10%
Leasehold improvements
1-18years
6%-100%
Equipment
5years
20%
Computers
2-4years
25%-50%
Furniture and fittings
5years
20%
Motor vehicles
5years
20%
Waka
10years
10%
Library books
10years
10%
Library subscriptions
2years
50%
Leasehold improvements are depreciated over the non-
cancellable period for which Te Wānanga o Aotearoa has
contracted to lease the asset together with any further terms
for which Te Wānanga o Aotearoa has the option to continue
to lease the asset.
The residual value and useful life of an asset is reviewed and
adjusted if applicable, at the end of each financial year end.
Revaluations
Land and buildings are revalued with sufficient regularity to
ensure that the carrying amount does not differ materially
from fair value and at least every two years.
The carrying values of revalued classes are assessed annually
to ensure that they do not differ materially from fair value. If
there is evidence supporting a material difference, then the
off-cycle asset classes are revalued.
Property, plant and equipment revaluation movements are
accounted for on a class-of-asset basis.
The net revaluation results are credited or debited to other
comprehensive income and are accumulated to an asset
revaluation reserve in equity for that class of asset. Where
this would result in a debit balance in the asset revaluation
reserve this balance is not recognised in other comprehensive
income but is recognised in the surplus or deficit. Any
subsequent increase on revaluation that reverses a previous
decrease in value recognised in the surplus or the deficit up
to the amount previously expensed and then recognised in
other comprehensive income.
Additions
The cost of an item of property, plant and equipment is
recognised as an asset if, and only if, it is probable that future
economic benefits or service potential associated with the
item will flow to Te Wānanga o Aotearoa and the cost of the
item can be measured reliably.
Work in progress is recognised at cost less impairment and is
not depreciated.
In most instances, an item of property, plant and equipment
is initially recognised at its cost. Where an asset is acquired at
no cost, or for a nominal cost, it is recognised at fair value as at
the date of acquisition.
Disposals
Gains and losses on disposals are determined by comparing
the proceeds with the carrying value of the asset. Gains and
losses on disposals are recognised in the surplus or deficit.
When revalued assets are sold, the amounts included in the
Notes to the financial statements (continued)
