Statement of Intent 2013 to 2016 - Human Rights Commission

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44 HUMAN RIGHTS COMMISSION | STATEMENT OF INTENTOther incomeOther income is received from the supply of contractwork; the sale of other sundry promotional materials; andthe provision of advice and educational seminars to thirdparties. Other income is recognised at the time the productor service is provided to the client.InterestInterest income is recognised using the effective interestmethod. Interest income on an impaired financial asset isrecognised using the original effective interest rate.LeasesFinance leasesA finance lease is a lease that transfers to the lesseesubstantially all of the risks and rewards incidental toownership of an asset whether or not title is eventuallytransferred.The finance charge is charged to the surplus or deficit overthe lease period so as to produce a constant periodic rateof interest on the remaining balance of the liability.At the commencement of the lease term, finance leasesare recognised as assets and liabilities in the statementof financial position at the lower of the fair value of theleased item or the present value of the minimum leasepayments.The amount recognised as an asset is depreciated overits useful life. If there is no certainty as to whether theCommission will obtain ownership at the end of the leaseterm, the asset is fully depreciated over the shorter of thelease term and its useful life.Operating leasesAn operating lease is a lease that does not transfersubstantially all the risks and rewards incidental toownership of an asset. Lease payments under an operatinglease are recognised as an expense on a straight-line basisover the lease term.Lease incentives received are recognised in the surplus ordeficit over the lease term as an integral part of the totallease expense.Financial instrumentsFinancial assets and financial liabilities are initiallymeasured at fair value plus transaction costs unless theyare carried at fair value through surplus and deficit in whichcase the transaction costs are recognised in the surplus ordeficit.Cash and cash equivalentsCash includes cash on hand and funds on deposit at bankswith an original maturity of three months or less.Debtors and other receivablesDebtors and other receivables are initially measured atfair value and subsequently measured at amortised costusing the effective interest method, less any provision forimpairment.Impairment of a receivable is established when there isobjective evidence that the Commission will not be able tocollect amounts due according to the original terms of thereceivable.Significant financial difficulties of the debtor, probabilitythat the debtor will enter into bankruptcy, and defaultin payments are considered indicators that the debtor isimpaired. The amount of the impairment is the differencebetween the asset’s carrying amount and the presentvalue of estimated future cash flows, discounted using theoriginal effective interest rate. The carrying amount of theasset is reduced through the use of an allowance account,and the amount of the loss is recognised in the surplusor deficit. Overdue receivables that are renegotiated arereclassified as current (that is, not past due).Foreign currency transactionsForeign currency transactions are translated into NewZealand dollars using the exchange rates prevailing atthe dates of the transactions. Foreign exchange gains andlosses resulting from the settlement of such transactionsand from the translation at year-end exchange rates ofmonetary assets and liabilities denominated in foreigncurrencies are recognised in the surplus or deficit.Property, plant and equipmentProperty, plant and equipment consists of motor vehicles,equipment, furniture and fittings, leasehold improvements,and library books.
HUMAN RIGHTS COMMISSION | STATEMENT OF INTENT45Property, plant and equipment is shown at cost, less anyaccumulated depreciation and impairment losses.AdditionsThe cost of an item of property, plant and equipment isrecognised as an asset, if and only if, it is probable thatfuture economic benefits or service potential associatedwith the item will flow to the Commission and the cost ofthe item can be measured reliably.Work in progress is measured at cost less impairment and isnot depreciated.In most instances, an item of property, plant and equipmentis initially recognised at its cost. Where an asset is acquiredat no cost, or for a nominal cost, it is recognised at fair valueas at the date of acquisition.DisposalsGains and losses on disposals are determined by comparingthe proceeds with the carrying amount of the asset. Gainsand losses on disposals are included in the surplus or deficit.Subsequent costsCosts incurred subsequent to initial acquisition arecapitalised only when it is probable that future economicbenefits or service potential associated with the item willflow to the Commission and the cost of the item can bemeasured reliably. The costs of day-to-day servicing ofproperty, plant and equipment are recognised in the surplusor deficit as they are incurred.DepreciationDepreciation is provided on a straight-line basis on allproperty, plant and equipment, at rates that will write offthe cost of the assets to their estimated residual values overtheir useful lives.The useful lives and associated depreciation rates of majorclasses of assets have been estimated as follows:Motor Vehicles 5 years 20%Equipment 3–5 years 20–33%Furniture and Fittings 5 years 20%Leasehold Improvements 5 years 20%Library Books 5 years 20%Leasehold improvements are depreciated over the unexpiredperiod of the lease or the estimated remaining useful lives ofthe improvement, whichever is the shorter.The residual value and useful life of an asset is reviewed, andadjusted if applicable, at each financial year-end.Intangible assetsSoftware acquisitionAcquired computer software licenses are capitalised on thebasis of the costs incurred to acquire and bring to use thespecific software.Costs associated with maintaining computer software, thedevelopment and maintenance of the Commission’s website,and staff training costs are recognised as an expense whenincurred.TrademarksTrademarks are capitalised on the basis of the costs incurredto register the trademark with the Intellectual PropertyOffice of New Zealand.AmortisationThe carrying value of an intangible asset with a finite lifeis amortised on a straight-line basis over its useful life.Amortisation begins when the asset is available for useand ceases at the date that the asset is derecognised. Theamortisation charge for each financial year is recognised inthe surplus or deficit.The useful lives and associated amortisation rates of majorclasses of intangible assets have been estimated as follows:Computer Software 3–5 years 20–50%Trademarks 10 years 10%Impairment of property, plant andequipment and intangible assetsProperty, plant and equipment, and intangible assetsthat have a finite useful life are reviewed for impairmentwhenever events or changes in circumstances indicatethat the carrying amount may not be recoverable. Animpairment loss is recognised for the amount by which theasset’s carrying amount exceeds its recoverable amount. Therecoverable amount is the higher of an asset’s fair value lesscosts to sell and value in use.
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Statement of Intent 2013 to 2016 - Human Rights Commission

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