Long Term Community Plan 2012-2022 - Hurunui District Council

Hurunui Community Long Term Plan 2012 - 2022
Dividend Revenue
Dividend income from investments is recognised as revenue, net
of imputation credits, when the shareholders’ rights to receive
payment have been established.
Other Revenue
Other revenue including assets vested in Council, with or
without restrictions, is recognised as revenue when control
over the assets is obtained.
Development Contributions
Development contributions are recognized as revenue when
the Council provides, or is able to provide, the service for
which the contribution was charged. Otherwise development
contributions are recognized as liabilities until such time the
Council provides, or is able to provide, the service.
Development contributions are classified as part of “Other
Revenue”.
Borrowing Costs
All borrowing costs are recognised as expenses in the statement
of comprehensive income in the period in which they are
incurred.
Income Tax
Income tax in relation to the surplus or deficit for the period
comprises current tax and deferred tax.
Current tax is the amount of income tax payable on the taxable
profit for the current year, plus any adjustments to income tax
payable in respect of prior years. Current tax is calculated using
rates that have been enacted or substantively enacted at balance
date.
Deferred tax is the amount of income tax payable or recoverable
in future periods in respect of temporary differences and unused
tax losses. Temporary differences are differences between
the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases in the computation
of taxable profit.
Deferred tax liabilities are generally recognised for taxable
temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Deferred tax is not recognised if the temporary difference
arises from the initial recognition of goodwill or from the initial
recognition of an asset and liability in a transaction that is not a
business combination, and at the time of the transaction, affects
neither the accounting profit nor taxable profit.
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.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised, using tax rates that have been enacted or substantially
enacted by balance date.
Current tax and deferred tax is charged or credited to the
statement of comprehensive income, except when it relates to
items charged or credited directly to equity, in which case the
tax is dealt with in equity.
Leases
Operational leases
An operating lease is a lease that does not transfer substantially
all the risks and rewards incidental to ownership of an asset.
Lease payments under an operating lease are recognised on a
straight-line basis over the lease term.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, demand
deposits and other short-term highly liquid investments that are
readily convertible to a known amount of cash and are subject
to an insignificant risk of changes in value, and with original
maturities of three months or less.
Trade and Other Receivables
Trade and other receivables are initially measured at fair value
and subsequently measured at amortised cost using the effective
interest rate method, less any provision for impairment.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been
incurred in bringing the inventories to their present location
and condition. Cost is calculated using the weighted average
method.
Net realisable value represents the estimated selling price less
all estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
Financial Assets
The Group classifies its financial assets into the following four
categories: financial assets at fair value through profit or loss,
held to maturity investments, loans and receivables and financial
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