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Reporting Entity
These are the financial statements of City Care Ltd, a wholly
owned subsidiary of 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 2005
