23 Statement of accounting policies Reporting entity The Law Commission is a Crown Entity established by the Law Commission Act 1985. These are forecast financial statements and have been prepared in accordance with the Crown Entities Act 2004. For the purposes of financial reporting the Law Commission is a public benefit entity. Basis of preparation The forecast financial statements have been adapted to comply with New Zealand equivalents to International Financial Reporting Standards. The preparation of forecast financial statements in conformity with NZ IFRS requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenditure. The forecast financial statements have been prepared on the historical cost basis, modified by the revaluation of library collections, furniture and fittings, and office equipment. The Law Commission has complied with FRS42 in the preparation of these prospective financial statements and they have been prepared pursuant to the requirements of the Public Finance Act 1989, as amended. Accounting policies The following accounting policies, which materially affect the measurement of financial performance and financial position, have been applied. These accounting policies have been applied consistently to all periods presented in these forecast financial statements. Revenue The Commission derives revenue from the provision of outputs to the crown, the sale of its publications to third parties, provision of specialist services, and income from investments. Government grant is recognised as revenue in the year in which it is appropriated and is recognised on a straight-line basis. Other revenue is recognised in the period in which it is earned.