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2 SUMMARY OF GENERAL ACCOUNTING POLICIES
2.1 Basis of preparation
(a) Reporting Entity
The financial statements include the consolidated results of Waikato Raupatu Lands Trust (controlling entity) and its subsidiaries
(controlled entities), together “the Trust”. Te Whakakitenga o Waikato Incorporated is the ultimate controlling party of the Trust.
(b) Statutory base
The consolidated financial statements of the Trust have been prepared in accordance with the Charities Act 2005, which
requires compliance with generally accepted accounting practice in New Zealand (“NZ GAAP”).
(c) Basis of preparation
The Trust has adopted External Reporting Board Standard A1 ‘Accounting Standards Framework (For-profit plus Public Sector
Public Benefit Entities plus Not-for-profit Entities minus For-profit Tier 3 and Tier 4 Update)’. The Trust is required to apply Tier
1 Not-for-profit Public Benefit Entities Accounting Standards (PBE Standards) as it has expenses over $30 million. The Trust
complies with these PBE standards and authoritative notices that are applicable to entities that apply PBE standards.
This is the first set of financial statements of the Trust that is presented in accordance with PBE standards. The Trust has
previously reported in accordance with NZ IFRS (PBE). The accounting policies adopted below are consistent with those
adopted in the previous financial year except where accounting or reporting requirements have been identified as different
between PBE standards and NZ IFRS PBE.
As a result of adoption of PBE standards there have been no measurement nor valuation adjustments to prior year comparatives.
There have been some disclosures and classifications changes to comply with requirement of PBE standards.
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated.
(d) Functional and presentation currency
Items included in the financial statements of each of the Groups entities’ 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 Trust’s functional and presentation currency.
All values are rounded to the nearest thousand dollars ($000) unless otherwise stated.
(e) Critical accounting estimates
The preparation of financial statements in conformity with PBE standards requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Trust’s accounting policies. The estimates and
judgements are reviewed by management on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised. The following are the critical estimates and judgements management has made in the process of applying
the Trust’s accounting policies and that have the most significant impact on the amounts recognised in the financial statements.
(i) 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 Trust 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 2016, the Trust 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 are likely to deviate substantially from amounts recorded. Any changes in the estimates will be
recorded in the accounting period in which they become known.