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Reporting Entity
These are the Financial Statements of City Care Ltd,
a wholly owned subsidiary of the Christchurch City
Holdings Limited.
City Care Ltd is a company registered under the
Companies Act 1993.
The Company is a Council-Controlled Trading
Organisation as defined in Section 6 of the Local
Government Act 2002.
The Financial Statements of City Care Ltd have been
prepared in accordance with the requirements of the
Companies Act 1993, the Financial Reporting Act 1993
and the Local Government Act 2002.
Measurement Base
The general accounting principles recognised as
appropriate for the measurement and reporting of results
and financial position on an historical cost basis have
been followed.
Accounting Policies
The following particular accounting policies, which
materially affect the measurement of financial results and
financial position, have been applied:
1. Goods and Services Tax
The financial statements have been prepared exclusive
of Goods and Services Tax (GST) with the exception of
receivables and payables, which are stated with
GST included.
2. Taxation
Income tax expense is charged in the Statement of
Financial Performance in respect of current year's
earnings after allowing for permanent differences.
Deferred taxation is determined on a comprehensive
basis using the liability method. Deferred tax assets
attributed to timing differences or tax losses are only
recognised where there is a virtual certainty of realisation.
3. Accounts Receivable
Accounts receivable are stated at expected realisable
value after providing for doubtful and uncollectable debts.
4. Inventories
Inventories are valued on the basis of the lower of
weighted average cost and net realisable value. This
valuation includes an allowance for obsolescence where
appropriate.
5. Employee Entitlements
Provision is made in respect of the Company's liability
for annual and long-service leave. Where this leave has
vested this has been calculated on an actual entitlement
basis at current rates of pay. An allowance has been
made for non-vested long service leave this has been
calculated on an actuarial basis.
6. Fixed Assets
Fixed assets are stated at historical cost, less
accumulated depreciation.
7. Depreciation
Depreciation is provided on a straight-line basis on all
fixed assets at rates which will write off the cost of the
assets to their estimated residual values over their useful
lives.
The depreciation rates of major classes of assets are as
follows:
· Plant, Equipment and Motor Vehicles 5.5% - 40%
· Office Furniture and Equipment 8% - 50%
8. Operating Leases
Operating lease payments, where the lessors effectively
retain substantially all the risks and benefits of ownership
of the leased items are charged as expenses in the
periods in which they are incurred.
9. Finance Leases
Leases which effectively transfer all of the risks
and benefits of ownership are classified as finance
leases. These leases are capitalised at the lower of
the fair value of the asset or the present value of the
minimum lease payments. The leased assets and
corresponding lease liabilities are recognised in the
Statement of Financial Position. The leased assets are
depreciated over the period the Company is expected to
benefit from their use.
STATEMENT OF
ACCOUNTING POLICIES
FOR THE YEAR ENDED 30 JUNE 2004
