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These statements have been compiled on the basis of government policies and the department’s purchase agreement with the Prime Minister at the time the statements were finalised.
These forecast financial statements comply with generally accepted accounting practice. The measurement base applied is historical cost adjusted for revaluations of assets. Revaluations are made to reflect the forecast service potential or economic benefit to be obtained through the control of assets.
The accrual basis of accounting has been used for the preparation of these financial statements.
These statements have been prepared on a going-concern basis.
The Statement of Unappropriated Expenditure and Statements of Departmental and Non-Departmental Expenditure and Appropriations are inclusive of GST. All other statements are GST exclusive. The Statement of Financial Position is also exclusive of GST, except for Creditors and Payables and Debtors and Receivables which are GST inclusive.
The amount of GST owing to or from the Inland Revenue Department at
balance date, being the difference between Output GST and Input GST, is
included in creditors and payables or debtors and receivables (as appropriate).
All fixed assets have been valued on historical cost basis, except for Crown
assets which are included at insurance indemnity value. All individual assets
or groups of assets are capitalised if their historical cost is $2,000 or greater.
Gains and losses arising from the sale or disposal of assets have been
included in the Statement of Financial Performance.
All fixed assets other than land 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 fixed assets are as follows:
| Fixtures and fittings | 10% |
| IT equipment | 33% |
| Office equipment | 20% |
| Furniture | 20% |
| Motor vehicles | 25% |
| Kitchen equipment, e.g. domestic appliances | 20% |
| Major plant and machinery | 10% |
| Minor plant and machinery | 20% |
The department is exempt from the payment of income tax in terms of the
Income Tax Act 1976. Accordingly, no charge for income tax has been
provided for.
The department is party to financial arrangements in the form of bank
accounts, accounts receivable, accounts payable, and accruals as part of its
everyday operations. These are reflected in the Statement of Financial
Position at their fair value. Revenue and expenses in relation to the financial
instruments are recognised in the Statement of Financial Performance in
arriving at the operating surplus.
Direct costs are expenses incurred from activities in producing outputs.
These costs are charged directly to the related output classes. Direct costs
represent 90 per cent of total departmental appropriation for output costs.
Indirect costs are expenses incurred by the corporate services unit and the
office of the chief executive. Indirect costs are allocated to each output class
in proportion to the level of appropriation in relation to the total vote.
Indirect costs represent 10 per cent of total departmental appropriation for
output costs.
The department leases office premises and photocopiers. As all risks and
ownership are retained by the lessor, these leases are classified as operating
leases. Operating lease costs are expensed in the period in which they are
incurred.
Provision is made in respect of the department’s liabilities for annual,
retirement and long service leave. Annual leave entitlements have been
calculated on an actual entitlement basis at current rates of pay; while other
provisions have been calculated on an actuarial basis, based on the present
value of expected future entitlements.
Future payments are disclosed as commitments at the points where a
contractual obligation arises, to the extent that they are equally unperformed
obligations. Commitments relating to employment agreements are not
disclosed.
Contingent liabilities are disclosed at the point at which the contingency is
evident.
There have been no changes in accounting policies, including cost allocation
accounting policies. All policies have been applied on bases consistent with
those used in the previous period.