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liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-
by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling
interest’s proportionate share of the acquiree’s net assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition date
fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets
acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a
bargain purchase, the difference is recognised directly in the statement of comprehensive income.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised
losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
(b) Transactions with non-controlling interests
The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases
from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying
value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also
recorded in equity.
(c) Joint arrangements
The Group has applied NZ IAS 31 to all joint ventures. Under NZ IAS 31 investments in joint ventures are classified as either
jointly controlled assets, joint operations or jointly controlled entities depending on the contractual rights and obligations of each
investor. The Group has assessed the nature of its joint ventures and determined them to be jointly controlled entities. Jointly
controlled entities are accounted for using the equity method.
Under equity method of accounting, interests in jointly controlled entities are initially recognised at cost and adjusted thereafter
to recognise the Group’s share of the post-acquisition profits or losses and movements in other comprehensive income. When the
Group’s share of losses in jointly controlled entities equals or exceeds its interest in the jointly controlled entity (which includes
any long term interests that, in substance, form part of the Group’s net investment in the jointly controlled entity), the Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the jointly controlled entity.
Unrealised gains or transactions between the Group and its jointly controlled entities are eliminated to the extent of the Group’s
interest in the jointly controlled entity. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the assets transferred.
2.5 Functional and presentation currency
Items included in the financial statements of each of the subsidiaries’ operations are measured using the currency of the primary
economic environment in which it operates (the functional currency). The consolidated financial statements are presented in
New Zealand dollars, which is the Parent’s functional currency and the Group’s presentation currency.
2.6 Revenue recognition
Revenue comprises the fair value of the sale of goods and services, net of Goods and Services Tax (GST), rebates and discounts and
after eliminating sales within the Group. Revenue is recognised as follows:
(a) Hotel income
Revenue from hotels comprises amounts earned in respect of services, facilities and goods supplied. Any revenue not recognised,
but received by the reporting date, is treated as deposits in advance and shown as a liability in the statement of financial position.
(b) Rental income
Rental income is recognised on a straight line basis over the lease term. Lease incentives which are offered to tenants as an
inducement to enter into non-cancellable operating leases are recognised as current prepayments and non-current lease fitout
contributions and are subsequently amortised over the term of the lease as a reduction of rental income.
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waikato-tainui
annual report 2015