Rates Recognition
Rates income is recognised on an accrual basis and is measured at the fair value of consideration received or receivable.
The following particular policies apply:
- General rates, targeted rates (excluding water-by-meter), and uniform annual general charges are recognised at the start of the financial year to which the rates resolution relates. They are recognised at the amounts due. The Council considers that the effect of payment of rates by instalments is not sufficient to require discounting of rates receivables and subsequent recognition of interest revenue.
- Rates arising from late payment penalties are recognised as revenue when rates become overdue.
- Rates remissions are recognised as a reduction of rates revenue when the Council has received an application that satisfies it rates remission policy.
- Water billing revenue is recognised on an accrual basis with unread meters at year end accrued on an average usage basis.
The Council is required by the LGFA Guarantee and Indemnity Deed to disclose in its financial statements (or notes) its annual rates revenue. That Deed defines annual rates revenue as an amount equal to the total revenue from any funding mechanism authorised by the Local Government (Rating Act) 2002 together with any revenue received by the Council from other local authorities for services provided by that Council for which those other Local Authorities rate. The annual rates revenue of the Council for the year ended 30 June 2016 for the purposes of the LGFA Guarantee and Indemnity Deed disclosure is shown below:
2014/15 Note 2 2015/16
$(000's) RATES $(000's)
33,187 General Rates 35,046
Targeted rates attributable to activities
371 Environmental Management 311
6 Transportation, Roads & Footpaths -
119 Coastal Structures 103
8,005 Water Supply 8,608
9,728 Wastewater 10,243
3,330 Stormwater 3,905
2,169 Solid Waste 2,180
2,996 Flood Protection and River Control Works 2,680
3,322 Community Facilities & Parks 3,330
1,192 Community Relations 1,205
672 Governance 288
31,910 32,853
65,097 Total rates 67,899
159
Rates revenue is shown net of rates remissions. The rates remission policy allows TDC to remit rates when certain conditions and criteria are met. Some examples of situations where rates may be remitted include when land has been detrimentally affected by natural disaster, on properties with a rating valuation up to $4,500, and on land used for sporting, recreation or community services purposes.
In accordance with Local Government (Rating) Act 2002 certain properties cannot be rated for general rates. This includes schools, places of religious worship, public gardens and reserves. These non-rateable properties, where applicable, may be subject to targeted rates in respect of wastewater, water, refuse and sanitation. Non rateable land does not constitute a remission under Councils rates remission policy.
A rating revaluation occurs every three years. They are prepared on behalf of the Tasman District Council by Quotable Value (QV). The entire process is independently audited by the Office of the Valuer General. The effective date for the current revaluation is 1 September 2014, and will be used by Council as the basis for distributing individual rates obligations for the three financial years, starting from 1 July 2015.
Lump sum contributions -
65,097 67,899
65,446 Total rates revenue 68,120
(349)
Rates remissions (221)
65,097 Rates revenue net of remissions 67,899
160
Revenue is recognised on an accrual basis and is measured at the fair value of consideration received or receivable.
The following particular policies apply:
- Development contributions and reserve financial contributions are recognised as revenue when the Council provides, or is able to provide, the service that gave rise to the charging of the contribution. Otherwise development contributions and financial contributions are recognised as liabilities until such time as the Council provides, or is able to provide, the service.
- Interest is recognised using the effective interest method.
- Dividends are recognised when the right to receive payment has been established.
- Where a physical asset is acquired for nil or nominal consideration the fair value of the asset received is recognised as revenue. Assets vested in Council are recognised as revenue when control over the asset is obtained. The fair value of vested or donated assets is usually determined by reference to the cost of constructing the asset. For assets received from property developments, the fair value is based on construction price information provided from the most recent revaluation.
- Infringements are recognised when the fine is issued.
2014/15 Note 3 2015/16
$(000's) OTHER REVENUE $(000's)
80 Rental revenue from investment properties 275
90 Infringements & fines 112
350 Petrol tax 360
132 Dividend revenue 120
2,327 Forestry Harvesting Revenue 4,464
7,172 Vested Assets 7,895
116 Gain on disposal of property plant and equipment 476
-
Insurance recoveries 176
6,691 Gain on changes in fair value of forestry assets 6,057
2,653 Other 1,102
19,611 21,037
161
Revenue is recognised on an accrual basis and is measured at the fair value of consideration received or receivable.
The following particular policies apply:
- Council receives government grants from the New Zealand Transport Agency, which subsidises part of Council’s costs in maintaining the local roading infrastructure. New Zealand Transport Agency revenue is recognised on entitlement when conditions pertaining to eligible expenditure are fulfilled.
- Other grants are recognised as revenue when they become receivable unless there is an obligation in substance to return the funds if conditions of the grant are not met. If there is such an obligation, the grants are initially recorded as grants received in advance and recognised as revenue when conditions of the grant are satisfied.
There are no un-fulfilled conditions and other contingencies attached to government grants recognised
Note 5: Fees and Charges
Revenue is recognised on an accrual basis and is measured at the fair value of consideration received or receivable.
The following particular policies apply:
- Fees and charges for building and resource consent services are recognised on a percentage completion basis with reference to the recoverable costs incurred at balance date.
2014/15 Note 4 2015/16
$(000's) SUBSIDIES & GRANTS $(000's)
7,860 NZ Transport Agency government grants 5,878
614 Government Grants 97
254 Government subsidies 1,826
8,728 7,801
2014/15 Note 5 2015/16
$(000's) FEES AND CHARGES $(000's)
3,697 Building, resource consent, public health and liquor licensing charges 3,912
4,053 Landfill/resource recovery centre charges 4,222
3,710 Sales 3,884
1,236 Sundry Fees & Recoveries 1,218
1,766 Other fees and charges 3,034
14,462 16,270