57 TE PŪRONGO 2013
• 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. Tauira and other receivables
Tauira fees andother 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. Kaimahi entitlements
Short-term kaimahi entitlements
Kaimahi 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 agreed
between TEC and TeWānanga oAotearoa. Revenue fromthese
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 being completed, deferred
income is recognised and is released over the specific period
using the stage of completion method.
Tauira fees
Revenue from tauira fees is recognised over the period
in which the course is taught by reference to the stage of
completion of the course as at the balance sheet date. Stage
of completion is measured by reference to the days of course
completed as a percentage of total days for each course.
Rental income
Rental income is recognised in the surplus or deficit on an
accrual basis.
Interest
Revenue is recognised as the interest accrues (using the
effective interest method which applies the interest rate that
exactly discounts estimated future cash receipts through the
expected life of the financial instrument) to the net carrying
amount of the financial asset.
16. Donations
Donations are received by Te Wānanga o Aotearoa from
the subsidiary company, Open Wānanga Limited. These
donations are recognised as revenue in the surplus or deficit
in the period in which they are received.
17. Equity
Equity is measured as the difference between total assets
and total liabilities. Equity is disaggregated and classified
into a number of reserves. The components of equity are:
