Departmental Forecast Report
for the year ending 30 June 2001
Part C - Additional information (continued)
Statement of significant Crown accounting policies
The Crown forecast financial statements comply with the Public Finance Act 1989.
Specific Accounting Policies
The accounting policies which appear on pages 20 to 22 (view the Statement for significant accounting policies section) for the departmental forecast financial statements, also apply to Crown activities. The following additional policies apply.
Crown Activities
The management of procurement or refurbishment of military equipment are reflected through the Crown Statement of Cash Flows. These activities are not reflected in the Crown Statement of Financial Performance because the military equipment procured or refurbished are not traded but passed at cost to the New Zealand Defence Force.
Goods and Services Tax (GST)
The GST inputs arising on the procurement or refurbishment of military equipment are not recoverable. Accordingly these costs have been expensed in the Crown Statement of Financial Performance.
Crown Work in Progress
Invoices for progress payments, and other add-on costs incurred in the procurement or refurbishment of various items of equipment on behalf of the Crown, are recognised at the time the liability arises.
Foreign Currency
Foreign currency transactions are converted at the New Zealand dollar exchange rate at the date of the transaction. Where a forward exchange contract has been used to establish the price of a transaction, the forward rate specified in that forward exchange contract is used to convert that transaction to New Zealand dollars. Consequently no exchange gain or loss resulting from the difference between the forward exchange contract rate and the spot exchange rate on date of settlement is recognised.
Monetary assets and liabilities are translated to New Zealand dollars at the closing mid-point exchange rate. The resulting unrealised exchange gain or loss is recognised in the Crown Statement of Financial Performance. Other exchange gains or losses, whether realised or unrealised, are recognised in the Crown Statement of Financial Performance in the period to which they relate.
Changes in Crown Accounting Policies
There have been no changes in the Crown accounting policies since the date of the last audited financial statements.
Procurement Matters
Australia and New Zealand have a common defence industry base established by the ANZAC Ship Treaty. To ensure that defence industry policy is harmonised to the greatest extent possible and to maximise the potential for joint or collaborative procurement, the Deputy Secretary (Acquisition), New Zealand Ministry of Defence and the Chief of Defence Acquisition of the Australian Department of Defence will meet once each year. In addition, Ministry of Defence procurement staff will participate in the Australian Defence Procurement Conference and meet with their Australian counterparts.
The 2000/2001 appropriation is for the following significant projects:
| $000 | |
|---|---|
| Continuation of ANZAC ship project | 61,601 |
| Orion aircraft life extension project | 5,383 |
| Maritime helicopters | 61,352 |
| Orion aircraft auto pilot | 1,894 |
| Very low-level air defence | 3,243 |
Other projects |
11,611 |
145,084 |
|
GST on defence equipment |
40,449 |
| Total | 185,533 |
The Ministry will maintain ISO 9001 certification.
