Waikato-Tainui Annual Report 2015

Derivative financial instruments are classified as either financial assets or financial liabilities measured at fair value through

profit or loss.

Impairment of financial assets

(a) Assets carried at amortised cost

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of

financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if

there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset

(a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of

financials assets that can be reliably measured.

Evidence of impairment may include indication that the debtors or a group of debtors is experiencing significant financial

difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other

financial reorganisation, and where observable data indicates that there is a measureable decrease in the estimated future cash

flows, such as changes in arrears or economic conditions that correlate with defaults.

Call option agreements are assessed annually for impairment and any impairment is recognised in the statement of

comprehensive income.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an

event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the

previously recognised impairment loss is recognised in the consolidated income statement.

2.16 Intangible assets

(a) Computer software

Separately acquired computer software and licenses at a cost greater than $10,000 are capitalised on the basis of the costs

incurred to acquire and bring to use the specific asset. These costs are amortised on a straight line basis over their estimated

useful lives of two years.

Costs under $10,000 associated with maintaining computer software programmes are recognised as an expense as incurred.

(b) Quota

Separately acquired fishing quota has an indefinite useful life and will generate economic benefits beyond one year. Fishing

quota is tested annually for impairment and is carried at cost less accumulated impairment. The useful life is assessed annually to

determine whether the indefinite useful life assessment continues to be supportable.

(c) Carbon credits

Intangible assets include carbon credits acquired by way of a Government grant and are initially recognised at fair value at the date

of acquisition. Following initial recognition, these intangible assets are carried at cost less any accumulated impairment losses.

The carbon Group is able to either hold the New Zealand Units (NZU) within the carbon register or alternatively trade the NZU’s

in domestic and international carbon markets.

Carbon credits are not consumed in the production and are therefore not amortised. The NZU’s are not amortised but are tested

for impairment on an annual basis or when indicators of impairment exist.

2.17 Property, plant and equipment

Farm and owner occupied properties are comprised of land, buildings and plant held on the farms as well as buildings occupied

by the Waikato Raupatu Lands Trust and Tainui Group Holdings Limited, a Group subsidiary, and are shown at fair value, based

on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation. Any accumulated

depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is

restated to the revalued amount of the asset.

waikato-tainui

annual report 2015