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These non-departmental schedules and statements present financial information on public funds managed by the department on behalf of the Crown.
These non-departmental balances are consolidated into the Financial Statements of the Government of New Zealand. For a full understanding of the Crown's financial position, results of operations and cash flows for the year, reference should also be made to the Financial Statements of the Government of New Zealand.
The non-departmental schedules and statements have been prepared in accordance with the government's accounting policies as set out in the Financial Statements of the Government of New Zealand and in accordance with the relevant Treasury instructions and Treasury circulars.
Measurement and recognition rules applied in the preparation of these non-departmental financial statements and schedules are consistent with New Zealand generally accepted accounting practice as appropriate for public benefit entities.
This is the first set of financial statements prepared using NZ IFRS. The comparatives for the year ended 30 June 2007 have been restated to NZ IFRS accordingly. Note 5 reconciles income and expenses and assets and liabilities for the year ended 30 June 2007 under NZ IFRS to their balances reported in the 30 June 2007 financial statements.
The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and in preparing an opening NZ IFRS Statement of Financial Position as at 1 July 2006 for the purpose of transition to NZ IFRS.
The following particular accounting policies, which materially affect the measurement of financial results and financial position, have been applied:
The budget figures are those presented in the Budget Estimates (Main Estimates) and those amended by the Supplementary Estimates and any transfer made by Order in Council under the Public Finance Act 1989.
All statements are GST exclusive, with the exception of the Statement of Financial Position where the entries for creditors and payables and for debtors and receivables are GST inclusive. In accordance with Treasury instructions, input-tax deduction is not claimed on non-departmental expenditure. Instead, the amount of GST applicable to non-departmental expenditure is recognised as a separate expense in the financial statements.
Land and buildings are recorded at fair value, as determined by an independent registered valuer. QV Valuations revalued land and buildings in Wellington and Auckland as at 30 June 2006. Fair value is determined using market-based evidence unless insufficient market-based evidence exists, in which case the land and buildings are valued at optimised depreciated replacement cost.
Land and buildings are revalued at least every three years. Additions between revaluations are recorded at cost.
Other artwork, ornaments and some antique furniture and fittings are revalued with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. They are recorded at this fair value, less accumulated depreciation and impairment losses.
Any revaluation surplus arising on the revaluation of a class of asset is transferred directly to the asset revaluation reserve. A revaluation deficit in excess of the asset revaluation reserve balance for the class of property, plant and equipment is recognised in the Statement of Financial Performance in the period in which it arises.
Other items of property, plant and equipment are recorded at cost, less accumulated depreciation and impairment losses. All individual assets are capitalised if their purchase cost is $2,000 or greater.
All items of property, plant and equipment have been depreciated on a straight-line basis that reflects the decline in service potential of the asset during the reporting period. Specific rates of depreciation used for the various classes of property, plant and equipment for the current and comparative periods are as follows:
| Buildings | 2% |
|---|---|
| Fixtures and fittings | 10% |
| Furniture | 20% |
| Motor vehicles | 25% |
| Plant and equipment | 20% |
| Other assets | 2%-20% |
Future payments are disclosed as commitments at the point where a contractual obligation arises, to the extent that they are equally unperformed obligations.
All financial assets and financial liabilities are measured at amortised cost.
Explanations for major variances from the non-departmental figures in the Main Estimates are as follows:
The appropriation for Government House – other payments (Civil List Act 1979) increased by $308,000 in the Supplementary Estimates. The change reflects cost increases associated with the Governor-General's programme of domestic and overseas travel and includes provision for likely increases in the Governor-General's remuneration and personal allowance, which are subject to annual review.
At 30 June 2008, expenditure under permanent legislative authority (the Civil List Act 1979) was underspent by $275,000 because of cancelled or rescheduled travel arrangements.
At 30 June 2008, total non-departmental expenses were $453,000 lower than Supplementary Estimates. This is due largely to the underspending of expenses incurred under permanent legislative authority explained above, and also to lower GST-input expenses resulting from lower-than-expected capital investment in stage one of the Government House conservation and refurbishment project.
At 30 June 2008, the department's bank balance was higher than expected because of underspending in non-departmental expenses, and higher-than-expected creditor balances.
| Land1 | Building1 | Plant and equipment | Furniture and fittings | Motor vehicles | Other assets | Total | |
|---|---|---|---|---|---|---|---|
| 1 Land and buildings have been revalued to fair value as at 30 June 2006 by an independently contracted registered valuer, QV Valuations. | |||||||
| Cost | |||||||
| Balance at 1 July 2006 | 33,850 | 17,038 | 238 | 1,264 | 160 | 1,507 | 54,057 |
| Additions | – | 105 | – | 40 | – | – | 145 |
| Disposals | – | – | – | – | – | – | – |
| Revaluation increase | – | – | – | 750 | – | 1,343 | 2,093 |
| Balance at 30 June 2007 | 33,850 | 17,143 | 238 | 2,054 | 160 | 2,850 | 56,295 |
| Balance at 1 July 2007 | 33,850 | 17,143 | 238 | 2,054 | 160 | 2,850 | 56,295 |
| Additions | – | 146 | – | – | – | – | 146 |
| Disposals | – | – | – | – | – | – | – |
| Balance at 30 June 2008 | 33,850 | 17,289 | 238 | 2,054 | 160 | 2,850 | 56,441 |
| Accumulated Depreciation and Impairment Losses | |||||||
| Balance at 1 July 2006 | – | – | 238 | 1,244 | 123 | 974 | 2,579 |
| Depreciation expense | – | 341 | – | 20 | 37 | 25 | 423 |
| Eliminate on disposal | – | – | – | – | – | – | – |
| Eliminate on revaluation | – | – | – | (489) | – | (221) | (710) |
| Impairment losses | – | – | – | – | – | – | – |
| Balance at 30 June 2007 | – | 341 | 238 | 775 | 160 | 778 | 2,292 |
| Balance at 1 July 2007 | – | 341 | 238 | 775 | 160 | 778 | 2,292 |
| Depreciation expense | – | 362 | – | 225 | – | 113 | 700 |
| Eliminate on disposal | – | – | – | – | – | – | – |
| Impairment losses | – | – | – | – | – | – | – |
| Balance at 30 June 2008 | – | 703 | 238 | 1,000 | 160 | 891 | 2,992 |
| Carrying value | |||||||
| At 1 July 2006 | 33,850 | 17,038 | – | 20 | 37 | 533 | 51,478 |
| At 30 June and 1 July 2007 | 33,850 | 16,802 | – | 1,279 | – | 2,072 | 54,003 |
| At 30 June 2008 | 33,850 | 16,586 | – | 1,054 | – | 1,959 | 53,449 |
| 30.6.07 | 30.6.08 | |
|---|---|---|
| Actual $000 |
Actual $000 |
|
| 17 | Trade creditors | 20 |
| 48 | Creditors relating to capital expenditure | 403 |
| 127 | Accrued expenses | 76 |
| 192 | Total creditors and other payables | 499 |
There have been no material adjustments to non-departmental assets and liabilities or to non-departmental income and expenses as a result of the transition to NZ IFRS.