Note 21: Explanation of transition to NZ IFRS
The Office’s financial statements for the year ended 30 June 2008 are the first financial statements that comply with NZ IFRS. The Office has applied NZ IFRS 1: First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards in preparing these financial statements.
The Office’s transition date is 1 July 2006. The Office prepared its opening NZ IFRS balance sheet at that date. The reporting date of these financial statements is 30 June 2008. The Office’s NZ IFRS adoption date is 1 July 2007.
| Note | Previous NZ GAAP 1 July 2006 | Effect on transition to NZ IFRS 1 July 2006 | NZ IFRS 1 July 2006 | Previous NZ GAAP 30 June 2007 | Effect on transition to NZ IFRS 30 June 2007 | NZ IFRS 30 June 2007 | |
|---|---|---|---|---|---|---|---|
| $000 | $000 | $000 | $000 | $000 | $000 | ||
| Current assets | |||||||
| Cash and cash equivalents | 2,992 | 0 | 2,992 | 3,844 | 0 | 3,844 | |
| Prepayments | 362 | 0 | 362 | 389 | 0 | 389 | |
| Work in progress | 1,378 | 0 | 1,378 | 1,525 | 0 | 1,525 | |
| Trade receivables | 3,510 | 0 | 3,510 | 4,103 | 0 | 4,103 | |
| Total current assets | 8,242 | 0 | 8,242 | 9,861 | 0 | 9,861 | |
| Non-current assets | |||||||
| Plant and equipment | a | 2,505 | (264) | 2,241 | 2,389 | (355) | 2,034 |
| Intangible assets | a | 0 | 264 | 264 | 0 | 355 | 355 |
| Total non-current assets | 2,505 | 0 | 2,505 | 2,389 | 0 | 2,389 | |
| Total assets | 10,747 | 0 | 10,747 | 12,250 | 0 | 12,250 | |
| Current liabilities | |||||||
| Payables and accruals | 3,613 | 0 | 3,613 | 5,008 | 0 | 5,008 | |
| Surplus payment to the Crown | 140 | 0 | 140 | 469 | 0 | 469 | |
| Employee benefit liabilities | b | 2,951 | 21 | 2,972 | 2,475 | 65 | 2,540 |
| Total current liabilities | 6,704 | 21 | 6,725 | 7,952 | 65 | 8,017 | |
| Non-current liabilities | |||||||
| Employee benefit liabilities | 457 | 0 | 457 | 712 | 0 | 712 | |
| Total non-current liabilities | 457 | 0 | 457 | 712 | 0 | 712 | |
| Total liabilities | 7,161 | 21 | 7,182 | 8,664 | 65 | 8,729 | |
| Net assets | 3,586 | (21) | 3,565 | 3,586 | (65) | 3,521 | |
| Taxpayers’ funds | |||||||
| General funds | b | 3,586 | (21) | 3,565 | 3,586 | (65) | 3,521 |
| Surplus for the year | 0 | 0 | 0 | 0 | 0 | 0 | |
| Total taxpayers’ funds | 3,586 | (21) | 3,565 | 3,586 | (65) | 3,521 | |
a. Intangible assets - Computer software was classified as part of plant and equipment under previous NZ GAAP. The net book value of computer software reclassified as an intangible asset on transition to NZ IFRS is $264,000, and at 30 June 2007 is $355,000.
b. Sick leave - Sick leave was not recognised as a liability under previous NZ GAAP. NZ IAS 19 requires the Office to recognise employees' unused sick leave entitlement that can be carried forward at balance date, to the extent that the Office anticipates it will be used by staff to cover future absences.
Reconciliation of surplus
The following table shows the changes in the Office's surplus, resulting from the transition from previous NZ GAAP to NZ IFRS for the year ended 30 June 2007.
| Note | Previous NZ GAAP 30 June 2007 | Effect on transition to NZ IFRS | NZ IFRS 30 June 2007 |
|
|---|---|---|---|---|
| $000 | $000 | $000 | ||
| Continuing activities | ||||
| Income | ||||
| Crown funding | 9,335 | - | 9,335 | |
| Audit fees – Departments | 7,781 | - | 7,781 | |
| Audit fees – Other | 22,815 | - | 22,815 | |
| Income of contracted audit service providers | 27,718 | - | 27,718 | |
| Miscellaneous | 166 | - | 166 | |
| Gain on sale of plant and equipment | 23 | - | 23 | |
| Total income | 67,838 | - | 67,838 | |
| Expenditure | ||||
| Personnel costs | a | 27,496 | 44 | 27,540 |
| Operating costs | 38,592 | - | 38,592 | |
| Depreciation and amortisation expense | 1,154 | - | 1,154 | |
| Capital charge | 267 | - | 267 | |
| Total expenditure | 67,509 | - | 67,553 | |
| Surplus | 329 | 44 | 285 | |
a. Sick leave liability - This represents the increase in the sick leave provision, which was not recognised under previous NZ GAAP.
Statement of cash flows
There have been no adjustments to the Statement of cash flows on transition to NZ IFRS.
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