Statement of Intent 2007-10: Part four - Forecast departmental financial statements and performance objectives
Notes
Note 1. Explanation of transition to NZ IFRS
These financial schedules for the year ending 30 June 2008 are the first financial schedules that comply with NZ IFRS. Inland Revenue has applied NZ IFRS 1 in preparing these financial schedules.
Reconciliation of equity
The following table shows the changes in equity, resulting from the transition from previous NZ GAAP to NZ IFRS as at 1 July 2007.
| Reconciliation of equity | Note | 30 June 2007 Estimated actual NZ GAAP $000 |
1 July 2007 Effect on transition to NZ IFRS $000 |
1 July 2007 Forecast NZ IFRS $000 |
|---|---|---|---|---|
| Taxpayers' funds | ||||
| Taxpayers' funds | A, B, D, E,F | 166,568 | (6,078) | 160,490 |
| Total taxpayers' funds | 166,568 | (6,078) | 160,490 | |
| Represented by: | ||||
| Current assets | ||||
| Cash and cash equivalents | 10,021 | 0 | 10,021 | |
| Debtor Crown | 90,389 | 0 | 90,389 | |
| Other debtors and prepayments | 7,325 | 0 | 7,325 | |
| Inventories held for distribution | A | 0 | 1,200 | 1,200 |
| Derivative financial instruments | B | 0 | 137 | 137 |
| Total current assets | 107,735 | 1,337 | 109,072 | |
| Non-current assets | ||||
| Property, plant and equipment | C | 144,242 | (106,511) | 37,731 |
| Intangible assets | C | 0 | 106,511 | 106,511 |
| Total non-current assets | 144,242 | 0 | 144,242 | |
| Total assets | 251,977 | 1,337 | 253,314 | |
| Current liabilities | ||||
| Creditors and other payables | D | 36,233 | (3,712) | 32,521 |
| Surplus payable to the Crown | 5,000 | 0 | 5,000 | |
| Provision for employee benefits | D, E | 16,107 | 5,736 | 21,843 |
| Provision for onerous contracts | 650 | 0 | 650 | |
| Leasing incentive liability | F | 0 | 187 | 187 |
| Total current liabilities | 57,990 | 2,211 | 60,201 | |
| Non-current liabilities | ||||
| Provision for employee benefits | E | 27,069 | 5,025 | 32,094 |
| Provision for onerous contracts | 350 | 0 | 350 | |
| Leasing incentive liability | F | 0 | 179 | 179 |
| Total non-current liabilities | 27,419 | 5,204 | 32,623 | |
| Total liabilities | 85,409 | 7,415 | 92,824 | |
| Net assets | 166,568 | (6,078) | 160,490 | |
Explanatory notes - Reconciliation of equity
A. Inventories held for distribution
Under current NZ GAAP, all inventories held for external distribution are expensed. On transition to NZ IFRS $1,200,000 worth of inventories held for distribution are recognised in the Statement of Financial Position as part of inventories.
B. Derivative financial assets
Financial derivatives are not recognised in the Statement of Financial Position under current NZ GAAP. NZ IFRS requiresfinancial derivatives to be recognised in the Statement of Financial Position at their fair value. On transition to NZ IFRS,gains on derivatives of $137,000 are recognised.
C. Intangible assets
Software is classified as part of property, plant and equipment under current NZ GAAP. The net book value of software reclassified as an intangible asset on transition to NZ IFRS is $106,511,000.
D. Accrued staff salaries
Accrued staff salaries are classified as part of creditors and other payables under current NZ GAAP. On transition to NZ IFRS, accrued staff salaries of $3,712,000 are transferred to the provision for employee benefits-current.
E. Sick leave provision
Sick leave is not recognised as a liability under current NZ GAAP. NZ IAS 19 requires Inland Revenue to recognise employees' unused sick leave entitlement that can be carried forward at balance date, to the extent that Inland Revenue anticipates it will be used by staff to cover future absences. On transition to NZ IFRS, short-term sick leave liability of $2,024,000 and long-term sick leave liability of $5,025,000 are recognised.
F. Leasing incentive liability
Under current NZ GAAP, rent free periods are recognised upfront and not recognised as a liability. On transition to NZ IFRS, a short-term rent holiday liability of $187,000 and a long-term rent holiday liability of $179,000 are recognised.
Other pages in: Part four - Forecast departmental financial statements and performance objectives
- Statement of responsibility
- Statement of accounting policies
- Forecast service performance
- Output expense 1 - Policy advice
- Output expense 2 - Services to inform the public about entitlements and meeting obligations
- Output expense 3 - Services to process obligations and entitlements
- Output expense 4 - Management of debt and outstanding returns
- Output expense 5 - Taxpayer audit
Date published: 25 Jun 2007
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