Rangatira Investments Annual Report 2021 - Report - Page 46
Ran ga tira Annua l R ep or t 2 0 2 1
Notes to the Consolidated
Financial Statements (continued)
For the year ended 31 March 2021
Note 7 Inventories
Inventories, consisting of merchandise held for resale, manufactured goods, manufacturing work in progress and raw materials are
valued at the lower of cost and net realisable value determined on a first-in first-out basis. Costs, including an appropriate portion
of direct overhead expenses, are assigned to inventory on-hand on a weighted average basis. Net realisable value represents the
estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Work in progress
Merchandise held for resale
Goods in transit
Provision for obsolescence
Note 8 Other Financial Assets
A financial asset or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly
attributable to its acquisition or issue. On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI –
debt investment; FVOCI – equity investment; or FVTPL, taking into account the business model within which they are managed, and
their contractual cash flow characteristics.
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing
financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the
change in the business model.
Financial assets at fair value through profit or loss (FVPTL)
The Group has classified certain unlisted shares, listed shares and derivatives as financial assets at fair value through profit or loss
where the financial asset is held for trading. The listed and unlisted shares have been acquired principally for the purpose of selling in
the near future. These financial assets are at fair value, with any resultant gain or loss recognised in the Income Statement.
Fair Value through Other Comprehensive Income (FVOCI)
Certain shares are classified as being FVOCI and are stated at fair value. These equity securities represent investments that the
Group intends to hold for the long term for strategic purposes. Changes in fair value are recognised in other comprehensive income.
Dividends are recognised in profit or loss when the Group’s right to receive the dividend is established
Fair value estimation
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance date. The Group uses
recent transaction prices and valuations provided by fund managers to estimate the fair value where such prices are not available.
IPEV valuation guidelines are used, which also ensures compliance with NZ IFRS 13.