Annual Report 2009 (PDF 2 MB) - Wellington Institute of Technology

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Cash and Cash EquivalentsCash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments,net of any outstanding bank overdrafts.Comparative FiguresWhen the presentation or classification of items in the financial statements has been amended, comparative amountshave been reclassified.Employee BenefitsProvision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long-serviceleave, and sick leave when it is probable that settlement will be required and they are capable of being measuredreliably.Provisions made in respect of employee benefits expected to be settled within 12 months are measured at theirnominal values, using the remuneration rate expected to apply at the time of settlement.Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measuredat the present value of the estimated future cash flows to be made in respect of services provided by employees up toreporting date.EquityEquity, being the difference between total assets and total liabilities reflects the Crown’s interest in WellingtonInstitute of Technology. This public equity is disaggregated and classified into a number of reserves to enable cleareridentification of the specific uses/sources of accumulated funds. The components of equity are:FINANCIAL STATEMENTS- Notional equity- Retained earnings- ReservesFinancial InstrumentsFinancial instruments arise as a result of the daily operation of Wellington Institute of Technology and include: cashand cash equivalents, receivables, payables, investments and non-current liabilities, all recognised in the balancesheet using the concepts of accrual accounting. Revenues and expenses in relation to all financial instruments arerecognised in the income statement.Foreign Currency TranslationBoth the functional and presentational currency of Wellington Institute of Technology is in New Zealand dollars ($).All foreign exchange currency transactions during the financial year are brought to account using the exchange rate ineffect at the day of the transaction. Exchange rate differences are recognised in the income statement in the period inwhich they arise.Goods and Services TaxThe financial statements are prepared on a GST-exclusive basis, except for receivables and payables that arerecognised inclusive of GST.Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arisingfrom the investing and financing activities, which is recoverable from, or payable to, the taxation authority, areclassified as operating cash flows.Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, thetaxation authority.WELLINGTON INSTITUTE OF TECHNOLOGY | 2009 ANNUAL REPORT29
Impairment of AssetsAt each reporting date, Wellington Institute of Technology reviews the carrying amounts of its tangible and intangibleassets to determine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairmentloss (if any). Where the asset does not generate cash flows that are independent from other assets, the recoverableamount from the cash-generating unit to which the asset belongs is estimated.Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, theestimated future cash flows are discounted to their present value, using a discount rate that reflects current marketassessments of the time value of money.FINANCIAL STATEMENTSAn impairment loss is recognised in the income statement, unless the relevant asset has a revaluation reservebalance, in which case the revaluation reserve is decreased by the appropriate amount.Intangible AssetsCourse development costsDevelopment costs for new courses internally developed or acquired which have a benefit of more than 1 year havebeen capitalised. Such costs are expected to be recovered, and are amortised on a straight-line basis over theperiod of their expected useful lives, being 3 years.SoftwareAll software purchased or created by Wellington Institute of Technology which have a benefit of more than 1 yearhave been capitalised. Such costs are expected to be recovered, and are amortised on a straight-line basis over theperiod of their expected useful lives, being 3 years.Assets under constructionCourse development and software assets under construction are treated as an intangible asset until completion.Upon completion of a project, the total cost is transferred to the appropriate asset class, at which point amortisationbegins.Interest-Bearing Loans and BorrowingAll loans and borrowings are initially recognised at cost, being the fair value of the consideration received net oftransaction costs associated with the borrowing.After initial recognition, interest-bearing loans and borrowings are measured at amortised cost using the effectiveinterest method. Amortised cost is calculated taking into account any transaction costs, and any discount orpremium on settlement.Gains and losses are recognised in the income statement when the liabilities are de-recognised, as well as throughthe amortisation process.InventoriesInventories available for resale are valued at the lower of cost and net realisable value. Consumables are recorded atcost.InvestmentsInvestments are initially recognised at cost, being the fair value of the consideration given. After the initial recognition,investments which are classified as available-for-sale are measured at fair value. Investments that are intended to beheld-to-maturity are subsequently measured at amortised cost using the effective interest method. Amortised cost iscalculated by taking into account any discount or premium on acquisition, over the period to maturity. Any changesin fair value throughout the term of the investment are recognised within the Income Statement.30WELLINGTON INSTITUTE OF TECHNOLOGY | 2009 ANNUAL REPORT
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Page 33 and 34: Income StatementFor the year ended
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Page 39 and 40: 2009 2009 2008Actual Budget Actual$
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Annual Report 2009 (PDF 2 MB) - Wellington Institute of Technology

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