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Notes to the non-departmental schedules and statements

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 2013. 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 2013.

Basis of Preparation

The non-departmental schedules and statements have been prepared in accordance with the accounting policies of 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 New Zealand generally accepted accounting practice as appropriate for public benefit entities.

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

Significant Accounting Policies

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 for the grant has been received.

Discretionary grants are those grants where the Ministry has no obligation to award on receipt of the grant application. They are recognised as expenditure when approved by the grants approvals committee and the approval 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

All items in the financial statements, including appropriation statements, are stated exclusive of goods and services tax (GST), except for 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.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, and deposits held at call with banks with maturities of three months or less.

Debtors and other receivables

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

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. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, receivership or liquidation, and default in payments are considered indicators that the debtor is impaired. 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 schedule of non-departmental expenses. When a debt is uncollectible, it is written-off against the allowance account for debtors. Overdue receivables that are renegotiated are reclassified as current (that is, not past due).

Property, plant and equipment

Property, plant and equipment 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% per annum.

Creditors and other payables

Creditors and other payables are recorded at their face 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.

Cancellable commitments that have penalty or exit costs in the agreement on exercising that option to cancel are included in the statement of commitments at the lower of the remaining contractual commitment and the value of that penalty or exit cost.

Budget figures

The budget figures are consistent with the financial information in the Main Estimates. In addition, these financial statements also present the updated budget information from the Supplementary Estimates.

Trust Monies

The Ministry administers trust monies on behalf of the Crown under Part VII of the Public Finance Act 1989. Under the Act, and by delegation from the Secretary to the Treasury, trust money can only be invested on deposit with New Zealand registered banks or in New Zealand Government stock. Trust money is also managed so that there is no significant concentration of credit risk. Interest rate risk is managed by investing across a wide range of maturity dates, subject to liquidity requirements.

Note 2: Buildings

 

Massey Memorial

$000

National
War Memorial

$000

Total

buildings

$000

Cost or valuation

 

 

 

Balance at 1 July 2011

1,250

8,530

9,780

Revaluation increase/(decrease)

270

(620)

(350)

Balance at 30 June and 1 July 2012

1,520

7,910

9,430

Balance at 30 June 2013

1,520

7,910

9,430

Accumulated depreciation and impairment losses

 

 

 

Balance at 1 July 2011

50

342

392

Depreciation expense

25

171

196

Elimination on revaluation

(75)

(513)

(588)

Balance at 30 June and 1 July 2012

Depreciation expense

30

159

189

Balance at 30 June 2013

30

159

189

Carrying amounts

 

 

 

At 1 July 2011

1,200

8,188

9,388

At 30 June and 1 July 2012

1,520

7,910

9,430

At 30 June 2013

1,490

7,751

9,241

The National War Memorial and Massey Memorial were revalued as at 30 June 2012 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 2013 is $1.912 million (2012: $1.912 million).

Note 3: Land

 

Massey Memorial

$000

National
War Memorial

$000

New Zealand Memorial Park

$000

Total

land

$000

Cost or valuation (and carrying amounts)

 

 

 

 

Balance at 1 July 2011

550

5,530

5,417

11,497

Revaluation increase/(decrease)

10

(30)

(20)

Balance at 30 June and 1 July 2012

560

5,500

5,417

11,477

Additions

473

473

Balance at 30 June 2013

560

5,500

5,890

11,950

The National War Memorial and Massey Memorial were revalued as at 30 June 2012 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 2013 is $4.750 million (2012: $4.750 million).

New Zealand Memorial Park was not revalued at 30 June 2012, due to the uncertainty around its future, relating to the announcement in August 2012 that it will be further developed as part of the undergrounding of a section of Buckle Street in Wellington.

Note 4: Financial Instruments

The carrying amounts of financial assets and financial liabilities in each of the NZ IAS 39 categories are as follows:

Actual

  2012

$000

 

Actual
2013

$000

 

Loans and receivables

 

2,570

Cash and cash equivalents

11,013

1,200

Debtors and other receivables

3,770

Total loans and receivables

11,013

 

Financial liabilities measured at amortised cost

 

435

Creditors and other payables

2,356

Credit risk

Credit risk is the risk that a third party will default on its obligation, causing a loss to be incurred. Credit risk arises from debtors and deposits with banks.  Funds must be deposited with Westpac, a registered bank. The maximum credit exposure for each class of financial instrument is represented by the total carrying amount of cash and cash equivalents and net debtors. There is no collateral held as security against these financial instruments, including those instruments that are overdue or impaired. Other than Westpac bank, there are no significant concentrations of credit risk.

Note 5: Explanations of major variances against budget

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

Schedule of income and expenses

Regional Museums

This appropriation was $2.067 million less than budget due to unexpected delays of two projects being funded from the Regional Museums capital construction fund.

Schedule of assets and liabilities

Creditors and other payables

Creditors and other payables were $2.156 million greater than budget due to unpaid invoices at year end for the New Zealand Screen Production Incentive Fund and Contribution to a Fund for Canterbury Heritage Buildings.


Updated on 23rd July 2015