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Budget 2024: The Government has announced FamilyBoost, a proposed new childcare payment to help eligible families with the rising costs of Early Childhood Education (ECE). Find out more: Beehive.govt.nz

Inland Revenue recognises a provision for future payments of uncertain amounts or timing where there is a present obligation (either legal or constructive) as a result of a past event, and it is probable that a payment will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for net deficits from future operating activities.

Provisions are recorded at the best estimate of the expenditure required to settle the obligation. Provisions to be settled beyond 12 months are recorded at their present value and are discounted using market yields on government bonds at balance date with terms to maturity that match, as closely as possible, the estimated timing of the future cash flows, where applicable.

The increase in the provision due to the passage of time is recognised as an interest expense and is included in finance expenses. 

The increase in the provision for lease make-good in 2022–23 is for potential leasehold restoration costs if we vacate some leased buildings or floors in the future.

Last updated: 19 Dec 2023
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