62 / 100
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 )
2.14 Biological assets – livestock and forestry
Biological assets are measured at fair value less estimated point of sale costs. The fair value of livestock is determined based on
market prices of livestock of similar age, breed and genetic merit. The fair value of forests are determined annually by independent
valuers by calculating the crop expectation and future value discounted back to the present value, based on the rotation age of the
crop and the current market prices of the logs. The valuation of Redwood trees is based on the current replacement cost method
used for young trees.
2.15 Financial assets and liabilities
Recognition and measurement
A financial asset or liability is recognised if the Group becomes party to the contractual provisions of the instrument. Regular
way purchases and sales of financial assets and liabilities are recognised on the trade date, the date on which the Group commits
to purchase or sell the asset or liability. A financial asset or liability is recognised initially at its fair value and in the case of a
financial asset or liability measured at amortised cost includes transaction costs that are directly attributable to the acquisition
or issue of the instrument.
Financial assets and liabilities measured at amortised cost
Financial assets measured at amortised cost are financial assets which meet the following criteria:
a) held within a business model whose objective is to hold an instrument in order to collect contractual cash flows; and
b) the contractual terms of the instrument gives rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial liabilities are measured at amortised cost unless they meet the definition of a financial liability measured at fair value
through profit or loss below.
A gain or loss on a financial asset and liability that is measured at amortised cost and is not part of a hedging relationship is
recognised in profit and loss when the instrument is de-recognised, impaired or reclassified and through the amortisation process.
Trade and other receivables are classified as financial assets measured at amortised cost. Trade and other payables and debt
instruments are classified as financial liabilities measured at amortised cost.
Financial assets and liabilities measured at fair value through profit or loss
Financial assets and liabilities measured at fair value through profit or loss are financial assets or liabilities held for trading or
on initial recognition have been designated as held at fair value. A financial asset or liability is classified as held for trading if
acquired principally for this purpose. Derivatives are also categorised as held for trading unless they are designated as hedges.
Assets and liabilities in this category are classified as current assets if expected to be settled within 12 months, otherwise they
are classified as non-current.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for
unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length
transaction pricing models refined to reflect the Group’s specific circumstances.
A gain or loss on a financial asset or liability that is measured at fair value and is not part of a hedging relationship shall be
recognised in profit and loss unless the financial asset is an investment in an equity instrument and the Group has made an
irrevocable election to present gains and losses on that investment in other comprehensive income.
Financial assets are de-recognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the Group has transferred substantially all risks and rewards of ownership. Financial liabilities are de-recognised if
the Group’s obligations specified in the contract expire or are discharged or cancelled.
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
60