25 Intangible assets Software Software that is not integral to the operation of the hardware is a finite life intangible and is recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a straight line basis over a period of three years. Leases Operating leases Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items are classified as operating leases. Operating lease expenses are recognised on a systematic basis over the period of the lease. Cost allocation policy Direct costs identifiable against specific projects are charged directly to those projects. Indirect costs are recorded against the generic cost and allocated at a later stage against projects on an hours spent basis. Financial instruments The Law Commission is a party to financial instruments as part of its normal operations. These financial instruments include bank accounts, short-term deposits, debtors and creditors. All financial instruments are recognised in the forecast Statement of Financial Position and all revenue and expenses in relation to financial instruments are recognised in the forecast Statement of Financial Performance. All financial instruments are shown at their estimated fair value. Accounts receivable Accounts receivable are stated at their estimated realisable value after providing for doubtful and un-collectable debts. Employee entitlements Provision is made in respect of employee�fs annual leave. It is calculated on current rates of pay and expected to be settled within 12 months of reporting date (or approval gained to carry forward leave) and is measured at nominal values on an actual entitlement basis at current rate of pay . These amounts are included within accounts payable. Provision is made for sick leave entitlement in accordance with NZ IAS 19.11,14 The Law Commission does not provide long service leave or retirement leave