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Statement of Accounting Policies
For the year to 30 June 2015
Air New Zealand Annual Financial Results 2015 7
Reporting entity
The financial statements presented are those of the consolidated Air New Zealand Group (the Group), including Air New Zealand Limited and its
subsidiaries, joint ventures and associates.
Air New Zealand’s primary business is the transportation of passengers and cargo on scheduled airline services.
Statutory base
The parent company, Air New Zealand Limited, is a profit-oriented entity, domiciled in New Zealand, registered under the Companies Act 1993
and listed on the New Zealand and Australian Stock Exchanges. Air New Zealand Limited is a FMC Reporting Entity under the Financial Markets
Conduct Act 2013 and the Financial Reporting Act 2013.
Basis of preparation
Air New Zealand prepares its financial statements in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”). NZ GAAP
consists of New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and other applicable financial reporting standards as
appropriate to profit-oriented entities. These financial statements comply with NZ IFRS and International Financial Reporting Standards (“IFRS”).
The financial statements were approved by the Board of Directors on 26 August 2015.
Basis of measurement
The financial statements have been prepared on the historical cost basis, with the exception of certain items as identified in specific accounting
policies and are presented in New Zealand Dollars which is the Group’s functional currency.
Use of accounting estimates and judgements
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the directors to exercise their
judgement in the process of applying the Group’s accounting policies. Estimates and associated assumptions are based on historical experience and
other factors, as appropriate to the particular circumstances. The Group reviews the estimates and assumptions on an ongoing basis.
Areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements
are disclosed within the specific accounting policy or note as shown below:
Area of estimate or judgement Note
Revenue in advance Note 1 Revenue recognition and segmental information
Aircraft lease return provisions Note 15 Provisions
Estimated impairment of non-financial assets ‘Impairment’ accounting policy
Note 9 Property, plant and equipment
Residual values and useful lives of aircraft related assets Note 9 Property, plant and equipment
Taxation Note 3 Taxation
Contingent liabilities Note 22 Contingent liabilities
Estimates are designated by an symbol in the notes to the functional statements.
Significant accounting policies
Accounting policies are disclosed within each of the applicable notes to the financial statements and are designated by a symbol.
The principal accounting policies applied in the preparation of these financial statements have been consistently applied to all periods presented,
except as detailed below.
The Group adopted NZ IFRS 9 (2010) – Financial Instruments and NZ IFRS 9 (2013) - Hedge Accounting and amendments to NZ IFRS 9, NZ IFRS
7 and NZ IAS 39. These standards and amendments, which are effective for periods commencing on or after 1 January 2018, were adopted with
effect from 1 July 2014. The impact of this change is explained in Note 23 Financial Risk Management.
Comparative information has been restated to reflect these new and amended standards, and reclassified to achieve consistency in disclosure with
the current period. In addition, the share of earnings from associates of $11 million for the year to 30 June 2014 was reclassified in the Statement of
Financial Performance from “Other revenue” to “Share of earnings of associates (net of taxation)”. Progress payments and capital work in progress
have been reclassified from “Other assets” to “Property, plant and equipment” or “Intangible assets”, as appropriate. Assets held for resale have been
reclassified to “Other assets”.
Air New Zealand has elected to early adopt all other NZ IFRSs and Interpretations that had been issued by the New Zealand Accounting Standards
Board, except as noted below. The early adoption did not have a material impact on the financial statements.
NZ IFRS 9 (2014) - Financial Instruments has not been adopted early. It includes a framework for classification and measurement of financial
instruments and a single, forward-looking impairment model. This Standard, which becomes effective for annual periods commencing on or after
1 January 2018, is not expected to have a significant impact on the financial statements.