Specific Accounting Policies

Budget figures

The Budget figures are those presented in the Budget Night Estimates (Main Estimates) and those amended by the Supplementary Estimates and any transfers made by Order-in-Council under section 26A of the Public Finance Act 1989.

Cost allocation

Those costs that can be specifically attributed to an output are charged directly to that output. All other costs are assigned through a methodology that cascades input costs to outputs as illustrated below.

Revenue

The Ministry derives revenue through the provision of outputs to the Crown and for services to third parties. Such revenue is recognised when earned and is reported in the financial period to which it relates.

Debtors and receivables 

Receivables are recorded at estimated realisable value after providing for doubtful and uncollectable debts.

Leases

These comprise of operating leases. Payments made under operating leases are recognised in the Statement of Financial Performance on a systematic basis over the period of the lease.

Property, plant and equipment

Land, buildings and vessels are stated at fair value, as established by an independent valuation for the Ministry of Fisheries, with subsequent additions at cost. For the purpose of these financial statements, land and buildings, although owned by the Crown, are deemed as being owned by the Ministry as principal occupier or user. Land, buildings and vessels are revalued on a cyclical basis. All assets within these classes are revalued, at least every five years.

All other property, plant and equipment is stated at cost less depreciation. Only property, plant and equipment with a cost in excess of $5,000 is capitalised.

Depreciation

Depreciation of property, plant and equipment, other than freehold land and work in progress, is provided on a straight-line basis so as to allocate the depreciable cost (or valuation) of assets over their estimated useful lives. The estimated economic useful lives are:

Buildings	10-100 years
Motor vehicles	up to 10 years
Vessels	4-25 years
Plant and equipment	up to 10 years

The cost of leasehold improvements is capitalised and depreciated over the unexpired period of the lease or useful life, whichever is the shorter.

Items under construction are not depreciated. The total cost of a capital project is transferred to the appropriate asset class on its completion and then depreciated.

Employee entitlements

Provision is made in respect of the Ministry’s liability for annual leave, long service leave and retirement leave. Annual leave has been calculated on an actual entitlement basis at current rates of pay. Employee entitlements to long service leave and retirement leave are recognised for all employees on the basis of an annual actuarial valuation based on the
present value of expected future entitlements.

Foreign currency

Foreign currency transactions are converted into New Zealand dollars at the exchange rate prevailing at the date of the transaction.

Statement of cash flows

Cash means cash balances on hand and held in bank accounts.

Operating activities include cash received from all income sources of the Ministry and record the cash payments made for the supply of goods and services.

Investing activities are those activities relating to the acquisition and disposal of non-current assets.

Financing activities comprise capital injections by, or repayment of capital to, the Crown.

Financial instruments

The Ministry is party to financial instruments as part of its normal operations. These financial instruments include bank accounts, debtors and creditors. All financial instruments are recognised in the Statement of Financial Position, and all revenues and expenses in relation to financial instruments are recognised in the Statement of Financial Performance.

Goods and Services Tax (GST)

All financial information is expressed exclusive of GST, except for Debtors and Receivables, and Creditors and Payables, which are expressed inclusive of GST in the Statement of Financial Position.

The amount of GST payable to or due from the Department of Inland Revenue at balance date is included in Creditors and Payables or Debtors and Receivables as appropriate.

Taxation

Government Departments are exempt from the payment of income tax in terms of the Income Tax Act 1994.

Commitments

Future expenses and liabilities to be incurred on non-cancellable operating leases, fisheries and biodiversity research contracts and registry services contracts entered into at balance date are disclosed as commitments to the extent that they are equally unperformed obligations.

Contingent liabilities

Contingent liabilities are disclosed at the point at which the contingency is evident.

Taxpayers’ funds

This is the Crown’s net investment in the Ministry.

Changes in accounting policies 

The accounting policies of the Ministry have not changed since the last audited financial statements. All policies have been applied on a basis consistent with the previous financial year.