Statement of Non-Departmental Accounting Policies
for the year ended 30 June 2008
Reporting entity
These non-departmental schedules and statements present financial information on public funds managed by the Ministry on behalf of the Crown.
These non-departmental balances are consolidated into the Financial Statements of the Government. 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.
Accounting Policies
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, and in accordance with relevant Treasury Instructions and Treasury Circulars.
Measurement and recognition rules applied in the preparation of these non-departmental schedules and statements 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. Reconciliations of assets and liabilities for the year ended 30 June 2007 under NZ IFRS to the balances reported in the 30 June 2007 financial statements are detailed in note 11.
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 purposes of the transition to NZ IFRS.
The following particular accounting policies have been applied:
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.
Revenue
Fines and Penalties
Revenue from fines and penalties are recognised when the infringement notice is issued.
Cost Recovery Levies
Cost recovery levies recover the costs of fisheries-related conservation services and fisheries services:
(a) provided to manage the harvesting or farming of fisheries resources; or
(b) provided to avoid, remedy, or mitigate a risk to, or an adverse effect on, the aquatic environment or the biological diversity of the aquatic environment.
The cost of fisheries services provided by the Ministry of Fisheries during the period 1 July 2007 to 30 June 2008 is recovered from the commercial fishing sector over the period 1 October 2007 to 30 September 2008. Such revenue is reported in the financial period to which the revenue relates.
Deemed Value Charges
Revenue from deemed value charges is recognised three months after the end of the fishing year after completion of review processes.
Debtors and Other Receivables
Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment changes.
Impairment of a receivable is established when there is objective evidence that the Ministry will not be able to collect amounts due according to the original terms of the receivable. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy, and default in payments are considered indicators that the debtor is impaired.
Creditors and Other Payables
Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate.
Goods and Services Tax
All items in the financial statements, including appropriation statements, are stated exclusive of GST, except for receivables and payables, which are stated on a GST inclusive basis. In accordance with Treasury Instructions, GST is returned on revenue received on behalf of the Crown, where applicable. However, an 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 and eliminated against GST revenue on consolidation of the government financial statements.