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Cash flows are included in the Statement of Cash Flows on a gross

basis and the GST component of cash flows arising from investing

and financing activities, which is recoverable from, or payable to,

the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount

of GST recoverable from, or payable to, the taxation authority.

(q) Financial instruments

Tourism New Zealand uses derivative financial instruments such

as foreign currency contracts to manage its exposure to foreign

exchange risk arising from its operational activities. Tourism

New Zealand does not hold or issue these financial instruments

for trading purposes. Tourism New Zealand has not adopted

hedge accounting.

Derivatives are initially recognised at fair value on the date a

derivative contract is entered into and are subsequently re-

measured to their fair value at each balance date. Movements in

the fair value of derivative financial instruments are recognised in

the Statement of comprehensive revenue and expense.

Foreign exchange gains and losses resulting from the settlement

of derivative financial instruments and from the translation

at year end exchange rates of monetary assets and liabilities

denominated in foreign currencies are recognised in the

Statement of comprehensive revenue and expense.

Cash and cash equivalents include cash on hand, cash in transit,

bank accounts and deposits with a maturity of no more than

three months from date of acquisition.

The fair value of forward exchange contracts is calculated by

reference to current forward exchange rates for contracts with

similar maturity profiles.

(r) Employee Benefits

Other Employee Entitlements: Employee entitlements for

salaries and wages, annual leave, long service leave, retiring

leave and other similar benefits are recognised in the Statement

of comprehensive revenue and expense when they accrue to

employees. Employee entitlements to be settled within 12 months

are reported at the amount expected to be paid. The liability for

long-term employee entitlements is reported as the present value

of the estimated future cash flows.

Termination Benefits: Termination benefits are recognised in

the Statement of comprehensive revenue and expense only

where there is a demonstrable commitment to either terminate

employment prior to normal retirement date or to provide

such benefits as a result of an offer to encourage voluntary

redundancy. Termination benefits settled within 12 months are

reported at the amount expected to be paid, otherwise they are

reported as the present value of the estimated future cash flows.

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