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Notes to the non-departmental statements and schedules for the year ended 30 June 2010

Notes to the non-departmental statements and schedules for the year ended 30 June 2010

Note 1: Statement of accounting policies

­Reporting entity

These non-departmental schedules and statements present financial information on public funds that are managed by the Ministry on behalf of the Crown.

These non-departmental balances are consolidated into the Financial Statements of the Government for the year ended 30 June 2010. For a full understanding of the Crown’s financial position, results of operations and cash flows for the year, refer to the Financial Statements of the Government for the year ended 30 June 2010.

Basis of preparation

The non-departmental schedules and statements have been prepared in accordance with the government’s accounting policies as set out in the Financial Statements of the Government, Treasury instructions and Treasury circulars.

Measurement and recognition rules applied in the preparation of these non-departmental schedules and statements are consistent with NZ GAAP, as appropriate for public benefit entities.

There have been no changes in accounting policies during the financial year.

Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial statements.

Revenue

Revenue from fines and other receipts is recognised when received.

Grant expenditure

Non-discretionary grants are those awarded if the grant application meets specified criteria. They are recognised as expenditure when an application that meets the specified criteria is received.

Discretionary grants are grants which the Ministry has no obligation to award. They are recognised as expenditure when the Grants Approvals Committee’s decision has been communicated to the applicant.

Foreign exchange

Foreign currency transactions are translated into New Zealand dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the schedule of non-departmental income or expenses.

Goods and services tax

Most items in the financial statements, including appropriation statements, are stated exclusive of goods and services tax (GST). The only exceptions are receivables and payables, which are stated on a GST-inclusive basis. In accordance with Treasury Instructions, GST is returned on revenue received on behalf of the Crown, where applicable. However, an input tax deduction is not claimed on non-departmental expenditure. Instead, the amount of GST applicable to non-departmental expenditure is recognised as a separate expense and eliminated against GST revenue on consolidation of the Financial Statements of the Government.

Debtors and other receivables

Debtors and other receivables are measured initially at fair value and subsequently at amortised cost using the effective interest method, less impairment changes.

Impairment of a receivable is established when there is objective evidence that the Ministry will not be able to collect amounts due according to the original terms of the receivable.

Indicators that the debtor is impaired include significant financial difficulties, the probability that it will enter into bankruptcy, and default in payments. The amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income. Overdue receivables that have been renegotiated are reclassified as current (i.e., not past due).

Creditors and other payables

Creditors and other payables are non-interest bearing and are normally settled on 30-day terms. The carrying value of creditors and other payables therefore approximates their fair value.

Commitments

Future expenses and liabilities to be incurred on non-cancellable contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Commitments that will incur penalty or exit costs if an option to cancel is exercised are included in the statement of commitments at the value of that penalty or exit cost.

Budget figures

The budget figures are consistent with the financial information in the Main Estimates. These financial statements also present the updated budget information from the Supplementary Estimates.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and funds on deposit with banks.

Property, plant and equipment

The property, plant and equipment assets administered by the Ministry on behalf of the Crown are the National War Memorial and the Massey Memorial. These assets are carried at fair value less subsequent impairment losses and, for non-land assets, less subsequent accumulated depreciation. They are revalued every three years. If it is established during the intervening period that a memorial’s carrying value may be materially different from its fair value, a revaluation will be sought.

Depreciation is charged on a straight-line basis at rates calculated to allocate the cost or valuation of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life.

The Ministry on behalf of the Crown currently depreciates buildings at 2% pa.

Critical accounting estimates and assumptions

In preparing these financial statements, the Ministry on behalf of the Crown has made estimates and assumptions that may differ from the subsequent actual results.

Where appropriate, the judgment or assumption that the Ministry has made on behalf of the Crown is provided in the relevant accounting policy or in the relevant note.

Estimates and assumptions are reviewed on an ongoing basis. They are based on historical experience and other factors that are believed to be reasonable under the circumstances. Where revisions to accounting estimates are made, these are recognised in the period in which the estimate is revised.

Note 2: Buildings

 

 

Massey Memorial

$000

National
War Memorial

$000

Total

buildings

$000

Cost or valuation

 

 

 

Balance at 1 July 2008

980

8,280

9,260

Revaluation increase

270

250

520

Balance at 30 June 2009 and 1 July 2009

1,250

8,530

9,780

Balance at 30 June 2010

1,250

8,530

9,780

Accumulated depreciation and impairment losses

 

 

 

Balance at 1 July 2008

40

330

370

Depreciation expense

20

165

185

Elimination on revaluation

(60)

(495)

(555)

Balance at 30 June 2009 and 1 July 2009

Depreciation expense for year ended 30 June 2010

25

171

196

Balance at 30 June 2010

25

171

196

Carrying amounts

 

 

 

At 1 July 2008

940

7,950

8,890

At 30 June and 1 July 2009

1,250

8,530

9,780

At 30 June 2010

1,225

8,359

9,584

The National War Memorial and Massey Memorial were revalued as at 30 June 2009 by Beca Valuations (an independent valuer) using depreciated building cost in accordance with NZ IAS 16. The Ministry on behalf of the Crown revalues the memorials every three years. The balance of the revaluation reserve at 30 June 2010 is $1.675 million.

Note 3: Land

Actual 2008/09

$000

 

Actual 2009/10

$000

550

Massey Memorial

550

5,530

National War Memorial

5,530

4,967

New Zealand Memorial Park

4,967

11,047

Total land

11,047

The National War Memorial and Massey Memorial were revalued as at 30 June 2009 by Beca Valuations (an independent valuer) using market-based evidence in accordance with NZ IAS 16. The Ministry on behalf of the Crown revalues the memorials every three years. The balance of the revaluation reserve at 30 June 2010 is $4.770 million.

Note 4: Explanations of major variations

The major variances from the Ministry’s non-departmental estimated figures in the Main Estimates are explained below:

Note

Actual 2009/10

$000

Main Estimates

Variance increase/

(decrease) 2009/10

$000

Variance increase/

(decrease) 2009/10

 %

Statement of non-departmental expenditure
and capital expenditure against appropriations

Vote Arts, Culture and Heritage

 

 

 

 

New Zealand Historic Places Trust

a

15,488

12,488

3,000

24

New Zealand Film Archive

a

3,070

1,070

2,000

187

Creative New Zealand

a

10,189

15,689

(5,500)

(35)

Commonwealth war graves

b

2,789

3,243

(454)

(14)

New Zealand Memorial Park*

b

350

Nurses Hostel at Hanmer Springs

c

1,500

1,500

Vote Sport and Recreation

 

 

 

 

Sport and recreation programmes

d

16,709

21,992

(5,283)

(24)

Support for New Zealand’s FIFA World Cup campaign

e

300

300

Schedule of non-departmental assets

 

 

 

 

Cash at bank and at hand

f

1,615

22,706

(21,091)

(93)

Schedule of non-departmental liabilities

 

 

 

 

Creditors and other payables

g

53

950

(897)

94

 

a) The New Zealand Lottery Grants Board provided additional one-off funding of $7.1 million to Creative New Zealand in 2009/10. As Creative New Zealand also receives Vote funding through the Promotion and Support of the Arts and Film appropriation, this provided an opportunity to re-prioritise $5.5 million of Crown funding within the Vote (also on a one-off basis) and enabled a one-off increase in 2009/10 for two projects: a fund to support urgent maintenance of the New Zealand Historic Places Trust’s properties, and support for priority film preservation work at the New Zealand Film Archive. The remaining $500,000 was re-prioritised within the Vote to meet other specific pressures in the heritage sector and to support cultural projects for the 2011 Rugby World Cup Festival.

b) Due to a favourable foreign exchange movement in relation to New Zealand’s annual contribution to the Commonwealth War Graves Commission, the full appropriation was not required during 2009/10. Funds were re-prioritised within the Vote to allow scope and design work for National Memorial Park to commence.

* Funding of $350,000 for New Zealand Memorial Park was appropriated in the Supplementary Estimates. However, work on the project did not commence before the end of the financial year (refer to the statement of non-departmental expenditure and capital expenditure against appropriations).

c) This was a new one-off appropriation in 2008/09. Because of unforeseen delays with the project the funding was not required in 2008/09; it was re-appropriated during 2009/10 to allow the completion of the project.

d) Funding in this output class was reprioritised during 2009/10 to fund the new initiative ‘KiwiSport’, which is appropriated within both Vote Education and Vote Sportand Recreation, and to shift funds for the ‘Green Prescriptions’ programme to Vote Health. This resulted in the appropriation decreasing by $5.283 million for 2009/10.

e) This was a new one-off appropriation for 2009/10 to support activities connected to New Zealand’s campaign at the 2010 FIFA World Cup.

f)Cash in the bank account and on hand is lower than budgeted in the Main Estimates due to the timing of disbursements made to funded agencies. In addition, the budget did not account for surplus cash returned to the Crown during the year.

g) Creditors and other payables are lower than budgeted due to timing differences.


Updated on 23rd July 2015