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Statement of Accounting Policies
Raukawa Settlement Trust
Statement of Accounting Policies
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For the year ended 30 June 2021
1. Reporting entity
The financial statements of Raukawa Settlement Trust (the Trust, RST) for the year ended 30 June 2021 comprise the Trust (the Parent), and the consolidated financial statements of the group comprising the Trust and its subsidiaries Raukawa Settlement Trust Limited, Raukawa Iwi Development Limited (RIDL), Raukawa Charitable Trust (RCT), Raukawa Asset Holding Company Limited (RAHCL).
2. Basis of preparation
(a) Statement of compliance
The financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”). They comply with the Public Benefit Entity Standards Reduced Disclosure Regime (“PBE Standards RDR”) as appropriate for Tier 2 not-for-profit public benefit entities, for which all reduced disclosure regime exemptions have been adopted. The Trust and Group are eligible to apply Tier 2 standards as they have less than $30 million annual expenditure and are not publicly accountable.
(b) Measurement basis
The consolidated financial statements have been prepared on the historical cost basis except for investment property, land & buildings, heritage assets and other investments that have been measured at fair value.
(c) Functional and presentation currency
The financial statements are presented in New Zealand dollars ($) which is the Group’s functional currency. There has been no change in the functional currency of the Group during the year. Transactions and balances reported in foreign currencies are translated to New Zealand Dollars at the rate prevailing on the date of the transaction.
(d) GST
Except for trade receivables and trade payables which are stated inclusive of GST, all amounts have been reported exclusive of GST.
(e) Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year.
The Trust and group’s initially recognises assets held at amortised cost on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Trust and group’s becomes a party to the contractual provisions of the instrument. The Trust and group’s derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Trust and group’s is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Trust and group’s has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Trust and group’s classifies non-derivative financial assets into the following categories: financial assets at fair value through other comprehensive income and those held at amortised cost. A financial asset is classified at fair value through other comprehensive income if it is not classified as held for trading or is designated as such upon initial recognition. Financial assets are designated as at fair value through other comprehensive income if the financial asset is held with a business mode whose objective is achieved by collecting contractual cash flows and selling financial assets and the contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
Raukawa Settlement Trust
Statement of Accounting Policies Cont.
For the year ended 30 June 2021
principal and interest. Attributable transaction costs are recognised in profit or loss as incurred. Financial assets at fair value through other comprehensive income are measured at fair value and changes therein are recognised in equity. Financial assets at fair value through other comprehensive income include financial derivatives.
Assets held at amortised cost
Assets held at amortised cost are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Assets held at amortised cost comprise cash and cash equivalents, and trade and other receivables.
Financial liabilities at amortised cost
The Trust and group’s’s financial liabilities are principally borrowings and trade and other payables and are measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an intergral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
3. Use of judgements and estimates
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are disclosed where applicable in the relevant notes to the financial statements, refer note14 PPE, note 15 Investment property, note 16 Investments in associate regarding the fair value of the acquisition in associate HCPLP and note 22 CNI Iwi Collective Settlement. Judgements made by management in the application of the PBE Standards RDR that have significant effects on the financial statements are disclosed, where applicable, in the notes to the financial statements. During the year, management made a revision decision on PPE to reflect the useful lives of all assets effective from 1 July 2020. Therefore, the depreciation has been changed for the majority of the assets and resulted in additional depreciation of $20,081.88.
4. Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Parent and subsidiaries controlled by the Parent. Control is achieved when the Parent has power over the investee and can determine the investee’s operating and financing policies, such that the parent can direct the investee to assist it achieving the parent’s own financial and public benefit objectives. Consolidation of a subsidiary begins when a Parent obtains control over the subsidiary and ceases when a Parent loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of comprehensive revenue and expenses from the date the Parent gains control until the date when a Parent ceases to control the subsidiary. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies.
