Mahitahi Hauora Annual Report 20222023 FINAL v17 - Flipbook - Page 33
30 June 2023 - Notes to the Financial Statements for the Year Ended
- its contractual terms give rise on
speci昀椀ed dates to cash flows that
are solely payments of principal and
interest on the principal amount
outstanding.
Financial assets – Management
model assessment
The Trust’s cash and cash
equivalents, short term deposits,
and receivables are classi昀椀ed as
昀椀nancial assets at amortised cost.
GST is not included.
Cash and cash equivalents
represent highly liquid investments
that are readily convertible into
a known amount of cash with an
insigni昀椀cant risk of changes in
value, with original maturities of 3
months or less. Short term deposits
are those with an original maturity
of more than 3 months.
and it does not retain control of the
昀椀nancial asset.
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.
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
Financial assets – Subsequent
measurement and gains and
losses
Financial assets at amortised cost
- These assets are subsequently
measured at amortised cost using
the effective interest method.
The amortised cost is reduced by
impairment losses. Interest income
and impairment are recognised in
surplus or de昀椀cit. Any gain or loss
on derecognition 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.
(v) Impairment of 昀椀nancial assets
Financial liabilities –
Classi昀椀cation, subsequent
measurement and gains and
losses
All of the Trust’s 昀椀nancial liabilities
meet the criteria to be classi昀椀ed as
measured at amortised cost. These
昀椀nancial liabilities are subsequently
measured at amortised cost using
the effective interest method.
Interest expense and foreign
exchange gains and losses are
recognised in surplus or de昀椀cit. Any
gain or loss on derecognition is also
recognised in surplus of de昀椀cit.
(iii) Derecognition
Financial assets
The Trust derecognises a 昀椀nancial
asset when the contractual rights
to the cash flows from the 昀椀nancial
asset expire, or it transfers the
rights to receive the contractual
cash flows in a transaction in
which substantially all of the risks
and rewards of ownership of the
昀椀nancial asset are transferred or in
which the Trust neither transfers
nor retains substantially all of the
risks and rewards of ownership
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
The Trust considers a 昀椀nancial
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.
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:
Building & Leasehold 3%
Improvements
Computer
Equipment &
Software
10% to 67%
Motor Vehicles
6% to 36%
Furniture & Fittings
and Plant &
Equipment (incls
Medical)
4% to 67%
(f) Impairment of non-昀椀nancial assets
33.