ARTA Annual Report 2009 - Auckland Transport

Deferred tax is recognised on taxable temporary differences arising on investments in subsidiaries
and associates, and interests in joint ventures, except where the company can control the reversal of
the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the entity expects to recover or settle the carrying amount of its assets and liabilities.
Income tax expense is charged or credited to profit or loss, except when it relates to items charged or
credited directly to equity, in which case the tax is dealt with in equity.
Goods and Services Tax (GST)
All items in the financial statements are stated exclusive of GST, except for receivables and payables, which
are stated on a GST inclusive basis. Where GST is not recoverable as input tax then it is recognised as part
of the related asset or expense.
The net amount of GST recoverable from, or payable to, the Inland Revenue Department (IRD) is included
as part of receivables or payables in the statement of financial position.
The net GST paid to, or received from the IRD, including the GST relating to investing and financing activities,
is classified as an operating cash flow in the statement of cash flows.
Commitments and contingencies are disclosed exclusive of GST.
Functional and Presentation Currency and Foreign Currency Translation
The financial statements are presented in New Zealand dollars and all values are rounded to the nearest
thousand dollars ($’000). The functional currency of ARTA is New Zealand dollars.
Foreign currency transactions are translated into the functional currency 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 income statement, except when deferred in equity
as qualifying cash flow hedges and qualifying net investment hedges.
Translation differences on non-monetary items, such as equities held at fair value through profit or loss,
are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as
equities classified as available-for-sale financial assets, are included in the fair value reserve in equity.
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