the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense and is included in finance costs. Organisational change costs A provision for organisational change costs arising from restructuring is recognised when an approved detailed formal plan for the restructuring has either been announced publicly to those affected, or for which implementation has already commenced. Commitments Expenses yet to be incurred on non-cancellable operating leases that have been entered into on or before balance date are disclosed as commitments to the extent that there are equally unperformed obligations. Cancellable operating leases that have penalty or exit costs explicit in the agreement on exercising that option to cancel are disclosed at the value of that penalty or exit cost. Accumulated funds Accumulated funds are the net surpluses and deficits that have accumulated over time and represent the Crown’s investment in the Commission. Accumulated funds are measured as the difference between total assets and total liabilities. Goods and services tax (GST) All items in the financial statements are stated exclusive of GST, except for receivables and payables which are stated on a GST inclusive basis. Where GST is not recoverable as input tax it is recognised as part of the related asset or expense. The net amount of GST recoverable from, or payable to, Inland Revenue (IRD) is presented in the statement of financial position. The net GST paid to or received from the IRD, including the GST relating to investing and financing activities, is classified as an operating cash flow in the statement of cash flows. Commitments and contingencies are disclosed exclusive of GST. 54 Income tax The Commission is a public authority and consequently is exempt from the payment of income tax. Accordingly, no provision has been made for income tax. Budget figures The budget figures are derived from the statement of performance expectations approved by the Board at the beginning of the financial year. The budget figures have been prepared in accordance with NZ GAAP using accounting policies that are consistent with those adopted by the Board in preparing these financial statements. Critical accounting estimates and assumptions In preparing these financial statements, the Commission has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below: Estimating useful lives and residual values of property, plant and equipment and intangible assets At each balance date, the useful lives and residual values of property plant and equipment and intangible assets are reviewed. Assessing the appropriateness of useful life and residual value estimates of property, plant and equipment and intangible assets requires a number of factors to be considered such as the physical condition of the asset, expected period of use of the asset by the Commission, and expected disposal proceeds from the future sale of the asset. An incorrect estimate of the useful life or residual value will affect the depreciation or amortisation expense recognised in the surplus or deficit in the statement of comprehensive revenue and expense, and the carrying amount of the asset in the statement of financial position. Human Rights Commission