IAS 1 para 97, separate disclosure of government assistance in relation to COVID – 19, airline

Air New Zealand Limited – Annual report – 30 June 2020

Industry: airlines

2. Expenses (extract)

Government grants and subsidies

Government grants and subsidies which compensate the Group for expenses incurred are recognised in the Statement of Financial Performance on a systematic basis over the period in which the related costs are recognised when they become unconditional. Grants and subsidies are reported on a net basis in the same line as the related expense.

Given the significant impact that Covid-19 has had on the New Zealand economy the New Zealand Government through the Ministry of Social Development provided wage subsidies for a 12 week period from 8 April 2020 through to the end of the financial year for those businesses which could demonstrate a 30% decline in revenues as a result of the pandemic. The wage subsidy was recognised within Labour expenses as an offset to the underlying labour cost. Conditions attached to the government subsidy which has been recognised in the Statement of Financial Performance to 30 June 2020 have been satisfied. In July 2020 the Group received a further $42 million in wage subsidies from the Ministry of Social Development for a 8 week period from 2 July 2020.

In May 2020 the New Zealand Government through the Ministry of Transport announced an aviation support package as a result of the impact of Covid-19 which included financial support to airlines to pay passenger-based government charges and Airways related fees. The package covers the period from 1 March 2020 through to 31 August 2020. Conditions attached to the government assistance which has been recognised to 30 June 2020 have been satisfied.