Waikato-Tainui: Annual Report 2016

3 TOTAL REVENUE (CONTINUED)

Recognition and measurement

Revenue from operating activities

Revenue from operating activities is exchange revenue and 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 Economic entity. Revenue is

recognised as follows:

(a) Rental revenue

Rental revenue 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 lease fitout contributions and are subsequently

amortised over the term of the lease as a reduction of rental revenue.

(b) Hotel revenue

Revenue from hotels comprises amounts earned in respect of services, facilities and goods supplied. Hotel revenue is

recognised by reference to the stage of completion of the service. 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.

Quota lease revenue is recognised on a straight line basis over the lease term.

(d) Dairy revenue

Dairy revenue is recognised when the Trust has transferred the significant risks and rewards of ownership of the goods sold.

(e) Other revenue

Other revenue is recognised when the Trust has transferred the significant risks and rewards of ownership of the goods sold

or when services have been rendered. For sections, recognition is on the sale contract becoming unconditional and the title

passing. The recorded revenue is the gross amount of the sale.

(f) Interest revenue

Interest revenue is recognised on a time proportion basis using the effective interest method. When a receivable is impaired,

the Trust reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original

effective interest rate of the instrument, and continues unwinding the discount as interest revenue. Interest revenue on

impaired loans is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the

impairment loss.

(g) Dividend revenue

Dividend revenue is recognised when the right to receive payment is established.

WAIKATO RAUPATU LANDS TRUST

Notes to the financial statements

FOR THE YEAR ENDED 31 MARCH 2016