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WAIKATO RAUPATU LANDS TRUST
Notes to the financial statements
FOR THE YEAR ENDED 31 MARCH 2016
2 SUMMARY OF GENERAL ACCOUNTING POLICIES (CONTINUED)
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.
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 statement of comprehensive revenue and expense.
2.6 Non-current assets held for sale
Non-current assets held for sale are classified as held for sale if their carrying amount will be recovered principally through a
sale transaction rather than through continuing use. Non-current assets held for sale include investment properties, property
plant and equipment, and lease incentives. The assets have been valued using the subsequent sale price as the key input to the
valuation.
2.7 Provisions
Provisions are recognised when the Trust has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are
not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in
the provision due to passage of time is recognised as interest expense.
2.8 Goods and services tax
The surplus and deficit component of the statement of comprehensive revenue and expense has been prepared so that all
components are stated exclusive of GST. All items in the statement of financial position are stated net of GST, with the exception
of receivables and payables, which include GST invoiced.
2.9 Statement of cash flows
The statement of cash flows is prepared exclusive of GST. For the purposes of the statement of cash flows, cash and cash
equivalents include cash in banks and investments in money market instruments, net of outstanding bank overdrafts.
Operating activities include all transactions and other events that are not investing or financing activities.
Investing activities are those activities relating to the acquisition and disposal of current and non-current investments and any
other non-current assets.
Financing activities are those activities relating to changes in the equity and debt capital structure of the Trust and those
activities relating to the cost of servicing the Trust’s equity capital.
2.10 Impairment of non-financial assets
(a) Indefinite useful life intangible assets
Where an intangible asset has an indefinite useful life, the asset will be tested annually for impairment by comparing the carrying
amount with its recoverable amount.