✨ Financial Statements Notes
2132 NEW ZEALAND GAZETTE No. 97
TELECOM AUCKLAND LIMITED
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
1 STATEMENT OF ACCOUNTING POLICIES (continued)
LIABILITY FOR EMPLOYEES' SEVERANCE PAYMENTS
Severance payments are accrued in respect of any employees whose positions have been specifically designated as being surplus to the needs of the Company. Employees whose services with the Company are so terminated are normally entitled to lump-sum severance payments determined by reference to current basic rate of pay, length of service and conditions under which the termination occurs. The continued period during which a terminating employee served both the New Zealand Post Office and subsequently the Telecom Group constitutes the length of service.
Such liabilities are reflected within accrued personnel costs.
PENSIONS
Contributions are made into the Government Superannuation Fund (the "Fund") in respect of those employees who are members of the Fund at a rate specified under the Sale and Purchase Agreement whereby Telecom acquired the telecommunication business of the New Zealand Post Office on 1 April 1987. Additionally, full provision is made for the accrued pension costs relating to members of the Telecom Employees' Pension Plan (the "Plan") upon the basis of actuarial valuations, which are to be made at least once every three years. Contributions to the Fund and the Plan are charged against earnings.
TAXATION
The taxation expense charged to earnings includes both current and deferred tax and is calculated after allowing for permanent differences. Deferred taxation calculated using the liability method is accounted for on all significant timing differences between the earnings stated in the financial statements and the assessable income computed for taxation purposes. Deferred taxation is recognised only on those timing differences that are expected to reverse within the foreseeable future.
FOREIGN CURRENCIES
The financial statements are expressed in New Zealand dollars. Foreign currency transactions are recorded at the exchange rate ruling at the date of the transaction except for hedged transactions, which are recorded at the hedged exchange rate. Monetary assets and liabilities denominated in foreign currencies have been translated to New Zealand currency at the spot rates of exchange ruling at balance date. Realised and unrealised profits and losses on foreign exchange transactions are recognised in earnings for the period.
The Company enters into contracts with Telecom (as the Group's central treasury operation) to manage the Company's foreign exchange exposure.
RECLASSIFICATIONS
Certain reclassifications of prior years' data have been made to conform to 1991 classifications.
(d) CHANGES IN ACCOUNTING POLICIES
There have been no material changes in accounting policies during the year.
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VUW Te Waharoa —
NZ Gazette 1991, No 97
NZLII —
NZ Gazette 1991, No 97
✨ LLM interpretation of page content
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Telecom Auckland Limited Financial Statements
(continued from previous page)
🏭 Trade, Customs & Industry7 June 1994
Telecommunications, Accounting Policies, Revenue Recognition, Fixed Assets, Liabilities, Pensions, Taxation, Foreign Currencies