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Statement of Accounting Policies

for the year ended 30 June 2005

Reporting entity

The Department of Building and Housing manages the Residential Tenancies Trust Account pursuant to the Public Finance Act 1989 and the Residential Tenancies Act 1986. The Department took over direct management of the Residential Tenancies Trust Account on 18 August 1992.

All interest arising from any investment in the Residential Tenancies Trust Account belongs to the Crown and is treated as other revenue to the Department of Building and Housing.

Investments are held in approved securities under the Public Finance Act 1989.

The Department of Building and Housing pays costs associated with the management of the Residential Tenancies Trust Account as Department expenses.

Measurement System

These financial statements have been prepared on the basis of modified historical cost except for certain items with specific accounting policies outlined below.

Accounting Policies

Accounts Receivable
Accounts receivable are stated at estimated realisable value.

Taxation
The Residential Tenancies Trust Account is exempt from income tax in terms of the Income Tax Act 1994. Accordingly, no charge for income tax has been provided for.

Investments
Investments are not generally traded but held to maturity. Investments in bonds are valued at cost with premiums and discounts on investments accounted for on a yield to maturity basis. Investments in bank deposits are valued at cost.

Cash
Cash is defined as coins, notes and demand deposits in the Trust bank account and other deposits held on call.

Revenue
The Trust derives revenue from interest on investments. Interest on investments is accrued on a monthly basis.

Financial instruments
The Residential Tenancies Trust Account is party to financial instruments as part of its normal operations. These financial instruments include accounts payable and receivable, cash, deposits and investments. Revenue and expenditure in relation to all financial instruments is recognised in the Statement of Financial Performance.

Except for those items covered by a separate accounting policy, all financial instruments are shown at estimated fair value.

Changes in accounting policies

There have been no changes in accounting policies. All policies have been applied on a basis consistent with other years.

Statement of Financial Performance

for the year ended 30 June 2005

  2005
Actual
$000
2004
Actual
$000
Revenue
Interest earned from government stock 387 650
Interest earned from bank deposits 10,805 8,464
Total Revenue 11,192 9,114
 
Expenditure
Interest to Department of Building and Housing 11,192 9,114
Operating Surplus - -

Reconciliation of Movements in Bondholders' Funds

for the year ended 30 June 2005

Bondholders' Funds at 1 July 167,720 147,332
 
Total Recognised Revenues and Expenses for the Year
Bonds lodged 109,707 102,693
Bonds refunded (90,362) (82,305)
Bondholders' Funds at 30 June 187,065 167,720

These financial statements to be read in conjunction with the attached accounting policies and notes to the financial statements.

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