2010-11 Annual Report - Taranaki District Health Board

Notes to the Financial Statements
For the Year Ended 30 June 2011
Significant accounting policies for the year ended 30 June 2011
(a) Reporting entity
Taranaki District Health Board is a Health Board established by the New Zealand Public Health and Disability Act 2000. Taranaki
District Health Board is a crown entity in terms of the Crown Entities Act 2004, owned by the Crown and domiciled in New
Zealand.
The financial statements of Taranaki District Health Board have been prepared in accordance with the requirements of the New
Zealand Public Health and Disability Act 2000 and Finance Act 1989.
Taranaki District Health Board is a public benefit entity, as defined by NZIAS 1.
The Taranaki District Health Board consolidated financial statements comprise those of Taranaki District Health Board, a 100%
investment in HIQ Limited, a 50% investment in Fulford Radiology Services Limited, a 25% investment in Allied Laundry Services
Limited and a 20% investment in HealthShare Limited.
Taranaki District Health Board operates in Taranaki. It has three key roles, namely (i) Planning to determine the health needs of
Taranaki and how these can be met, (ii) Funding organisations and individuals to provide specific health services and (iii) Providing
specific health services to the Taranaki community.
The financial statements of Taranaki District Health Board are for the year ended 30 June 2011. The financial statements were
authorised for issue by the Board on 20 October 2011.
(b) Statement of compliance and basis of preparation
These financial statements have been prepared in accordance with NZ GAAP (generally accepted accounting principles). They
comply with the New Zealand equivalents to International Financial Reporting Standards ("NZIFRS"), and other applicable Financial
Reporting Standards, as appropriate for public benefit entities.
The financial statements have been prepared on a historical cost basis, modified by the revaluation of land and buildings, certain
investments and derivative financial instruments.
(i) Functional and presentation currency
The financial statements are presented in New Zealand dollars which is the functional currency of Taranaki District Health Board. All
financial information presented in New Zealand dollars has been rounded to the nearest thousand ($'000) unless stated otherwise.
(ii) Use of estimates and judgements
In preparing these financial statements Taranaki District Health Board has made estimates and assumptions concerning the future.
These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated
and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below:
Allowance for impairment loss on trade receivables (note 8)
A monthly assessment of non commercial debtors is made, with an impairment allowance being provided for based on the age of
these debts. In June of each year all non commercial debts that are aged over 12 months that are not being paid off by the debtor is
written off. Refer to note 8 for the amount per year of non commercial debt after the impairment allowance.
Fair value of buildings
Taranaki District Health Board revalues land and buildings on either a five year cycle or when there is a material (10% or over)
change between the independent valuation and the carrying value of the land and buildings. The independent valuation also
determines the remaining life of buildings, and therefore the annual depreciation cost in future years.