Building Lifelong Relationships - NUSS

NUSS
ANNUAl RepoRt 2006
PG
72
Notes to the financial statements
2 Summary of significant accounting policies (cont’d)
Inventories
Inventories, which comprise principally bar and consumable food stocks, are stated at cost. Cost is determined on a first-in
first-out basis.
Financial assets
The Society classifies its financial assets, other than hedging instruments, into the following categories: financial assets at
fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets.
Financial assets are assigned to the different categories by Management Committee on initial recognition, depending on the
purpose for which the financial assets were acquired. The designation of financial assets is re-evaluated and classification
may be changed at the reporting date. All financial assets are recognised on their trade date – the date on which the
Society commits to purchase or sell the assets. Financial assets are initially recognised at fair value, plus directly attributable
transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value.
Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or are
transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment
is undertaken at least at each balance sheet date whether or not there is objective evidence that a financial asset or a group
of financial assets is impaired.
Non-compounding interest and other cash flows resulting from holding financial assets are recognised in income and
expenditure account when received, regardless of how the related carrying amount of financial assets is measured.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and a fixed date
of maturity that the Society has the positive intent and ability to hold to maturity. Held-to-maturity investments are
subsequently measured at amortised cost using the effective interest method. In addition, if there is objective evidence that
the investment has been impaired, the financial asset is measured at the present value of estimated cash flows. Any changes
to the carrying amount of the investment are recognised in income and expenditure account. Any reversal shall not result in
a carrying amount that exceeds what the amortised cost would have been had any impairment loss not been recognised at
the date the impairment is reversed. Any reversal is recognised in the income and expenditure account.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They arise when the Society provides money, goods or services directly to a debtor with no intention of
trading the receivables. They are included in current assets, except for maturities greater than 12 months after the balance
sheet date. These are classified as non-current assets.
Loans and receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Any change in their value is recognised in the income and expenditure
account. Any reversal shall not result in a carrying amount that exceeds what the amortised cost would have been had
any impairment loss not been recognised at the date the impairment is reversed. Any reversal is recognised in the income
and expenditure account.