financial
statements
19
METeorological service of new zealand ltd
annual report 2012
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered
an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where it is not possible
to estimate the recoverable amount of an individual asset,
the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs. Where a reasonable
and consistent basis of allocation can be identified, corporate
assets are also allocated to individual cash-generating units,
or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment
annually, and whenever there is an indication that the asset
may be impaired.
Recoverable amount is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised
immediately in the Statements of Comprehensive Income.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset (or cash-generating unit)
in prior years. A reversal of an impairment loss is recognised
immediately in the Statements of Comprehensive Income.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction, net of tax, from the proceeds.
Critical accounting judgments and key sources of
estimation uncertainty
In the application of the Group’s accounting policies, the
Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on
historical experience and other factors that are considered
to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and
future periods.
In particular, information about significant areas of estimation
uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognised in the financial statements are described in the
following notes:
(
i) Note 10: Provisions – measurement of restoration
provisions.
(
ii) Note 18: Other Intangible Assets – measurement of
goodwill impairment of subsidiaries.
(
iii) Note 18 Other Intangible Assets – measurement of the
fair value of the customer base.
Group 2012 Group 2011
Parent 2012 Parent 2011
2
OPERATING EXPENDITURE
$000s
$000s
$000s
$000s
Profit / (Loss) for the year has been arrived after charging/(crediting)
Audit Fees
90
87
40
37
Other Fees Paid to Auditors for IT Security Review
13
–
13
–
Loss on Disposal of Property, Plant and Equipment
23
1
20
1
Impairment of Software Development
2,241
–
151
–
Directors’ Fees
190
158
190
158
Bad Debts Recovered
–
(24)
–
–
Software Development Expenditure
133
136
1
7
FX Losses/(Gains)
67
129
(16)
–
During the current financial year, the Group made an impairment adjustment of $2.24m for software development in progress.
The large investment and risk required to complete the software development did not justify the potential returns. The
impairment is net of $144,000 of recoverable development which will be used in other products.
Group 2012 Group 2011
Parent 2012 Parent 2011
3
EMPLOYEE BENEFITS EXPENSE
$000s
$000s
$000s
$000s
Wages and Salaries
22,386
21,135
15,635
15,947
Termination Benefits
28
7
28
7
Defined Contribution Pension Plan Expense
487
277
487
277
Labour Capitalised
(4,181)
(4,179)
(2,198)
(3,195)
Contractors / Temporary Staff
1,022
569
299
344
Other Employee Benefits
679
628
649
589
Total Employee Benefits
20,421
18,437
14,900
13,969
