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2 S umm a r y o f s i g n i f i c a n t a c c o u n t i n g p o l i c i e s ( c on t i n u e d )
(a) Relativity settlement
Relativity is the mechanism under which further settlement is recognised (see note 1 for further details). The receipt of funds from
the Crown will be settled on a five yearly basis.
The calculation of future receivable amounts requires significant judgment and estimation. The Group uses its judgment to
determine the value of the undisputed portion of all Treaty settlements and makes assumptions based on information available
such as Crown’s statements, individual Treaty Settlement Deeds and other financial information. For the year ended 31
March 2015, the Group has determined those undisputed and reliably measured portions of Treaty settlements made are only
settlements paid in cash, and therefore has recognised a relativity settlement receivable on that basis.
It should be noted that given the complex nature of the relativity settlement and ongoing disputes with the Crown, actual
relativity settlement payments will likely deviate, perhaps substantially, from amounts recorded. Any changes in the estimates will
be recorded in the accounting period in which they become known.
(b) Fair value of assets and liabilities
The Group records certain assets and liabilities at fair value in the statement of financial position as follows:
Farm and owner occupied properties (note 17), investment properties (note 18) and Te Wherowhero title properties (note 19) are
stated at fair value. The fair values have been determined by independent valuers as at 31 March 2015 and 31 March 2014 using
a mixture of market evidence of transactional prices for similar properties, direct comparison, capitalisation and discounted cash
flow approaches.
Biological assets (note 12) comprise livestock and forests. Both are fair valued by independent valuers using current market prices
less point of sale costs (livestock) and expectation value method less point of sale costs (forests).
Other financial assets at fair value through profit or loss (note 15) include shares in listed and unlisted companies held at fair value
and call option agreements for property. The fair value of shares in unlisted companies and call option agreements, in the absence
of quoted prices, has been determined using valuation techniques.
Interest rate swaps (note 23) are valued using discounted cash flow techniques.
The determination of fair value for each of the assets and liabilities above requires significant estimation and judgement which
have a material impact on the statement of comprehensive income and statement of financial position.
(c) Impairment testing
Intangible assets with indefinite useful lives (note 16) are required to be tested for impairment at least annually. This requires
an estimation of the recoverable amount of the quota based on the higher of value in use or fair value less costs to sell. The
determination of the recoverable amount of the quota requires significant estimation and judgement.
2.4 Principles of consolidation
(a) Subsidiaries
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and
operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect
of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for
the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by
the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration
arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent
waikato raupatu lands trust
notes to the financial statements
f o r t h e y e a r e n d e d 3 1 m a r c h 2 0 1 5
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