Auckland Transport Statement of Intent 2012 - 2015

ATTACHMENT D – Statement of accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out
below.
Basis of preparation
Statement of compliance
The financial statements of Auckland Transport have been prepared in accordance with the requirements
of the Local Government Act 2002, which includes the requirement to comply with New Zealand
generally accepted accounting practice (“NZ GAAP”).
These financial statements have been prepared in accordance with NZ GAAP. They comply with
NZIFRS, and other applicable Financial Reporting Standards, as appropriate for public benefit entities.
Measurement base
The financial statements are prepared based on historical cost modified by the revaluation of the
following:
financial assets and liabilities at fair value
derivative financial instruments at fair value
certain classes of property, plant and equipment at methods appropriate to the class of asset
The methods used to measure fair value are discussed in the specific accounting policies.
Functional and presentation currency
The financial statements are presented in New Zealand dollars ($), which is Auckland Transport‟s
functional currency, and have been rounded to the nearest thousand unless otherwise stated.
Costs allocation
Cost of service for each activity was allocated as follows:
Direct costs are charged directly to activities. Indirect costs are charged to activities using
appropriate cost drivers such as actual usage, staff numbers and floor area.
Direct costs are those costs directly attributable to an activity. Indirect costs are those costs that
cannot be identified in an economically feasible manner with a specific activity.
Standards, amendments, and interpretations issued but not yet effective that have not been early
adopted, and which are relevant to Auckland Transport are:
NZ IFRS 9 Financial Instruments will eventually replace NZ IAS 39 Financial Instruments:
Recognition and Measurement. NZ IAS 39 is being replaced through the following 3 main phases:
Phase 1 Classification and Measurement, Phase 2 Impairment Methodology, and Phase 3 Hedge
Accounting. Phase 1 has been completed and has been published in the new financial
instrument standard NZ IFRS 9. NZ IFRS 9 uses a single approach to determine whether a
financial asset is measured at amortised cost or fair value, replacing the many different rules in
NZ IAS 39. The approach in NZ IFRS 9 is based on how an entity manages its financial assets
(its business model) and the contractual cash flow characteristics of the financial assets. The
financial liability requirements are the same as those of NZ IAS 39, except for when an entity
elects to designate a financial liability at fair value through surplus or deficit. The new standard is
required to be adopted for the year ended 30 June 2014. Auckland Transport has not yet
assessed the effect of the new standard and expects it will not be early adopted.