58 TE PŪRONGO 2013
• retained earnings
• property revaluation reserve
Property revaluation reserve
This reserve relates to the revaluation of property, plant, and
equipment to fair value.
18. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST except:
• where the GST incurred on a purchase of goods and
services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense item as
applicable
• receivables and payables are stated with the amount of
GST included.
The net amount of GST recoverable from or payable to
the taxation authority is included as part of receivables or
payables in the statement of financial position. The net GST
paid to, or received from the taxation authority, including the
GST relating to investing and financing activities, is classified
as a net operating cash flow in the statement of cash flows.
Commitments and contingencies are disclosed exclusive of
GST.
19. Budget figures
Budget figures are those approved by Te Mana Whakahaere
at the beginning of the year. Budget figures are prepared
in accordance with NZ GAAP and are 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
TeWānanga 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 14.
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 12 provides information about the estimates and
assumptions exercised in the measurement of revalued land
and buildings.
Notes to the financial statements (continued)
