Inspiring New Zealanders on Every Screen - Tvnz

40 / TVNZ ANNUAL REPORT FY2009Notes to the Financial Statements (continued)For the year ended 30 June 2009s) Employee benefitsProvision is made for employee benefits accumulated as a result of employees rendering services up to balance date. The benefitsinclude wages and salaries, incentives, compensated absences and retirement leave which are expensed in the income statement whenservices are provided or benefits vest with the employee. The provision for employee benefits is stated at the present value of theestimated future cash outflows to be incurred resulting from employees’ services provided up to balance date.t) ProvisionsProvisions are recognised when the Group has present legal or constructive obligation as a result of a past event that can be estimatedreliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.If the effect of time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-taxrate that reflects current market assessments of the time value of money and the risks specific to the liability.u) <strong>New</strong> accounting standards and interpretationsStandards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Groupfor the annual reporting period ending 30 June 2009. These are noted below.NZ IFRS 8 – Operating SegmentsReplaces NZ IAS 14 Segment Reporting, the new standard requires a management approach to segment reporting. NZ IFRS 8 isa disclosure standard so will not have a direct impact on the amounts included in the Group’s financial statements. However theamendments may have an impact on the Group’s segment disclosures. The application date for this standard is for accounting periodsbeginning on or after 1 January 2009, the application date for the Group for this standard is 1 July 2009.NZ IAS 1 (revised) – Presentation of Financial StatementsThe revised standard introduces a statement of comprehensive income. Other revisions include changes to the presentation of itemsin the statement of changes in equity, new presentation requirements for restatements or reclassifications of items in the financialstatements, changes in the presentation requirements for dividends and changes to the titles of financial statements. The amendmentsare expected to only affect the presentation of the Group’s financial statements and will not have a direct impact on the measurementand recognition of amounts under the current NZ IAS 1. The Group has not determined at this stage whether to present the newstatement of comprehensive income as a single or two statements. The application date for this standard is for accounting periodsbeginning on or after 1 January 2009, the application date for the Group for this standard is 1 July 2009.NZ IFRS 7 (amended) – Financial Instrument: DisclosuresThe amended NZ IFRS requires fair value measurements to be disclosed by the source of inputs using a three level hierarchy. NZ IFRS 7is a disclosure standard so will not have a direct impact on the Group’s financial statements. The application date for this standard is foraccounting periods beginning on or after 1 January 2009, the application date for the Group for this standard is 1 July 2009.NZ IAS 23 (revised) – Borrowing CostsThe amendments to NZ IAS 23 require that all borrowing costs associated with a qualifying asset must be capitalised. The Group mayhave qualifying assets which will require borrowing costs to be capitalised. The application date for this standard is for accountingperiods beginning on or after 1 January 2009, the application date for the Group for this standard is 1 July 2009.3) Significant accounting judgements, estimates and assumptionsThe preparation of the financial statements requires management to make judgements, estimates and assumptions that affect thereported amounts in the financial statements. Estimates and assumptions are reviewed by management on an ongoing basis. Actualresults may differ from these estimates.Management has identified the following accounting policies for which significant judgements, estimates and assumptions are made:Estimation of useful lives of property, plant and equipment and finite-lived intangible assetsThe estimated useful life of a particular asset is based on historical experience, the expected service potential of the assets andtechnological advances. Adjustments to useful lives are made when considered necessary.Income taxes and deferred taxThe Group’s accounting policy for taxation requires management to make estimates as to, amongst other things, the amount of tax thatwill be payable, the availability of losses to be carried forward and the recovery of deferred tax assets.Deferred tax assets are recognised for deductible temporary differences as management considers that it is probable that future taxableprofits will be available to utilise those temporary differences.Capitalised development costsDevelopment costs are only capitalised by the Group when it can be demonstrated that the technical feasibility of completing theintangible asset is valid so that the asset will be available for use.Actual results may differ from these estimates as a result of reassessment by management or taxation authorities.