129.037-Mahitahi-Hauora-Annual-Report-2023-24-v8---Low-Res-Spreads (1) - Flipbook - Page 45
30 June 2024 - Notes to the Financial Statements for the Year Ended
Financial liabilities
The Trust derecognises a onancial
liability when its contractual
obligations are discharged or
cancelled or expire. The Trust also
derecognises a onancial liability
when its terms are modioed and the
cash flows of the modioed liability
are substantially different, in which
case a new onancial liability based
on the modioed terms is recognised
at fair value.
The Trust considers a onancial
asset to be in default when:
- the borrower is unlikely to pay its
credit obligations to the Trust in full,
without recourse by the Trust to
actions such as realising security (if
any is held); or
- the onancial asset is more than 90
days past due.
Measurement of ECLs
On derecognition of a onancial
liability, the difference between the
carrying amount extinguished and
the consideration paid (including
any non-cash assets transferred or
liabilities assumed) is recognised in
surplus or deocit.
(iv) Offsetting
Financial assets and onancial
liabilities are offset, and the net
amount presented in the statement
of onancial position when, and only
when, the Trust currently has a
legally enforceable right to set off
the amounts and it intends either
to settle them on a net basis or
to realise the asset and settle the
liability simultaneously.
ECLs are a probability-weighted
estimate of credit losses. Credit
losses are measured as the present
value of all cash shortfalls (i.e., the
difference between the cash flows
due to the entity in accordance with
the contract and the cash flows
that the Trust expects to receive).
ECLs are discounted at the effective
interest rate of the onancial asset.
(e) Property, plant and equipment
Items of property, plant and
equipment are measured at cost
less accumulated depreciation and
impairment losses.
Cost includes expenditure that
is directly attributable to the
acquisition of the asset.
(v) Impairment of onancial assets
The Trust recognises loss
allowances for expected credit
losses (ECLs) on onancial assets
measured at amortised cost.
Loss allowances for trade
receivables are always measured
at an amount equal to lifetime
ECLs. When determining whether
the credit risk of a onancial
asset has increased signiocantly
since initial recognition and
when estimating ECLs, the
Trust considers reasonable and
supportable information that is
relevant and available without
undue cost or effort. This includes
both quantitative and qualitative
information and analysis, based on
the Trust9s historical experience
and informed credit assessment
and including forward-looking
information.
The Trust assumes that the credit
risk on a onancial asset has
increased signiocantly if it is more
than 30 days past due.
Where an item of property and
equipment is disposed of, the gain
or loss recognised in the surplus or
deocit is calculated as the difference
between the sales price and the
carrying amount of the asset.
Depreciation is recognised in the
surplus or deocit on a diminishing
value basis over the estimated
useful lives of each component
of an item of property, plant and
equipment. Leased assets under
onance leases are depreciated over
the shorter of the lease term or
their useful lives.
The diminishing value depreciation
rates are:
(f) Impairment of non-onancial assets
The carrying amounts of the Trust9s
non-onancial assets are reviewed
at each reporting date to determine
whether there is any indication of
impairment. If any such indication
exists, then the asset9s recoverable
amount is estimated.
The recoverable amount of an
asset or cash generating unit is the
greater of its value in use and its fair
value less cost to sell. In assessing
value in use, the estimated future
cash flows are discounted to their
present value using a pre-tax
discount rate that reflects current
market assessments of the time
value of money and the risks
specioc to the asset.
An impairment loss is recognised
if the carrying amount of the asset
or its cash generating unit exceeds
its estimated recoverable amount.
Impairment losses are recognised
in surplus or deocit.
Impairment losses recognised in
previous years are assessed at each
reporting date for any indication
that the loss has decreased or no
longer exists. An impairment loss is
reversed only to the extent that the
asset9s carrying amount does not
exceed the carrying amount that
would have been determined, net
of depreciation and amortisation,
if no impairment loss had been
recognised.
(g) Goods and Services Tax (GST)
The onancial statements have been
prepared on a GST exclusive basis,
with the exception of receivables
and payables which are stated
inclusive of GST.
(h) Income tax
The Trust is exempt from income
tax as a result of being granted
charitable status by the Inland
Revenue Department.
Building & Leasehold 3% - 20%
Improvements
Computer
Equipment &
Software
10% to 67%
Motor Vehicles
10% to 15%
Furniture & Fittings
and Plant &
Equipment (incls
Medical)
4% to 67%
45.
