27 Goods and Services Tax (GST) All items in the financial statements are presented exclusive of GST, with the exception of receivables and payables, which are presented on a GST inclusive basis. Where GST is not recoverable as an input tax then it is recognised as part of the related asset or expense. The net amount of GST recoverable from or payable to Inland Revenue Department (IRD) is included as part of receivables or payables 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. Taxation The Law Commission is a public authority in terms of the Income Tax Act 2007 and consequently is exempt from income tax. Budget Figures The budget figures are those as disclosed in the 2008-2011 Statement of Intent as approved by the Commissioners. The budget figures have been prepared using accounting policies that are consistent with those adopted by the Commission for the preparation of the financial statements. The budgets have been prepared in accordance with NZ IFRS, using accounting policies consistent with those adopted by the Law Commission for the preparation of the financial statements. Cost allocation Direct costs identifiable against specific projects are charged directly to those projects. Indirect costs are charged to specific projects in proportion to the direct labour hours recorded against those projects. “Direct costs” are those costs directly attributable to a speci “Indirect costs” are those costs which cannot be identified in an economically feasible manner with a specific project. Critical accounting estimates and assumptions In preparing these financial statements the Law Commission has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results.