129.037 Mahitahi Hauora Annual Report 2023-24 v8 - Low Res Spreads - Flipbook - Page 45
30 June 2024 - Notes to the Financial Statements for the Year Ended
Financial liabilities
The Trust derecognises a 昀椀nancial
liability when its contractual
obligations are discharged or
cancelled or expire. The Trust also
derecognises a 昀椀nancial liability
when its terms are modi昀椀ed and the
cash flows of the modi昀椀ed liability
are substantially different, in which
case a new 昀椀nancial liability based
on the modi昀椀ed terms is recognised
at fair value.
On derecognition of a 昀椀nancial
liability, the difference between the
carrying amount extinguished and
the consideration paid (including
any non-cash assets transferred or
liabilities assumed) is recognised in
surplus or de昀椀cit.
(iv) Offsetting
Financial assets and 昀椀nancial
liabilities are offset, and the net
amount presented in the statement
of 昀椀nancial position when, and only
when, the Trust currently has a
legally enforceable right to set off
the amounts and it intends either
to settle them on a net basis or
to realise the asset and settle the
liability simultaneously.
The Trust considers a 昀椀nancial
asset to be in default when:
- the borrower is unlikely to pay its
credit obligations to the Trust in full,
without recourse by the Trust to
actions such as realising security (if
any is held); or
- the 昀椀nancial asset is more than 90
days past due.
Measurement of ECLs
ECLs are a probability-weighted
estimate of credit losses. Credit
losses are measured as the present
value of all cash shortfalls (i.e., the
difference between the cash flows
due to the entity in accordance with
the contract and the cash flows
that the Trust expects to receive).
ECLs are discounted at the effective
interest rate of the 昀椀nancial asset.
(e) Property, plant and equipment
Items of property, plant and
equipment are measured at cost
less accumulated depreciation and
impairment losses.
Cost includes expenditure that
is directly attributable to the
acquisition of the asset.
(v) Impairment of 昀椀nancial assets
The Trust recognises loss
allowances for expected credit
losses (ECLs) on 昀椀nancial assets
measured at amortised cost.
Loss allowances for trade
receivables are always measured
at an amount equal to lifetime
ECLs. When determining whether
the credit risk of a 昀椀nancial
asset has increased signi昀椀cantly
since initial recognition and
when estimating ECLs, the
Trust considers reasonable and
supportable information that is
relevant and available without
undue cost or effort. This includes
both quantitative and qualitative
information and analysis, based on
the Trust’s historical experience
and informed credit assessment
and including forward-looking
information.
The Trust assumes that the credit
risk on a 昀椀nancial asset has
increased signi昀椀cantly if it is more
than 30 days past due.
Where an item of property and
equipment is disposed of, the gain
or loss recognised in the surplus or
de昀椀cit is calculated as the difference
between the sales price and the
carrying amount of the asset.
Depreciation is recognised in the
surplus or de昀椀cit on a diminishing
value basis over the estimated
useful lives of each component
of an item of property, plant and
equipment. Leased assets under
昀椀nance leases are depreciated over
the shorter of the lease term or
their useful lives.
The diminishing value depreciation
rates are:
(f) Impairment of non-昀椀nancial assets
The carrying amounts of the Trust’s
non-昀椀nancial assets are reviewed
at each reporting date to determine
whether there is any indication of
impairment. If any such indication
exists, then the asset’s recoverable
amount is estimated.
The recoverable amount of an
asset or cash generating unit is the
greater of its value in use and its fair
value less cost to sell. In assessing
value in use, the estimated future
cash flows are discounted to their
present value using a pre-tax
discount rate that reflects current
market assessments of the time
value of money and the risks
speci昀椀c to the asset.
An impairment loss is recognised
if the carrying amount of the asset
or its cash generating unit exceeds
its estimated recoverable amount.
Impairment losses are recognised
in surplus or de昀椀cit.
Impairment losses recognised in
previous years are assessed at each
reporting date for any indication
that the loss has decreased or no
longer exists. An impairment loss is
reversed only to the extent that the
asset’s carrying amount does not
exceed the carrying amount that
would have been determined, net
of depreciation and amortisation,
if no impairment loss had been
recognised.
(g) Goods and Services Tax (GST)
The 昀椀nancial statements have been
prepared on a GST exclusive basis,
with the exception of receivables
and payables which are stated
inclusive of GST.
(h) Income tax
The Trust is exempt from income
tax as a result of being granted
charitable status by the Inland
Revenue Department.
Building & Leasehold 3% - 20%
Improvements
Computer
Equipment &
Software
10% to 67%
Motor Vehicles
10% to 15%
Furniture & Fittings
and Plant &
Equipment (incls
Medical)
4% to 67%
45.
