New Zealand Gazette – 1991 – No. 97

Page 2147

✨ Financial Statements Continuation



28 JUNE NEW ZEALAND GAZETTE 2147

TELECOM CENTRAL LIMITED AND SUBSIDIARY

NOTES TO THE FINANCIAL STATEMENTS

(CONTINUED)

1 STATEMENT OF ACCOUNTING POLICIES (CONTINUED)

DEPRECIATION

Depreciation is charged on a straight line basis so as to write down the cost of the fixed assets to their estimated residual value over their estimated economic lives, which are as follows:

Telecommunication equipment and plant:

  • Customer local loop ... 5-30 years
  • Junctions and trunk transmission systems ... 10-30 years
  • Switching equipment ... 5-15 years
  • Customer premises equipment ... 5 years
  • Other network equipment ... 5-25 years

Other:

  • Buildings ... 40-100 years
  • Motor vehicles ... 5 years
  • Furniture and fittings ... 5-10 years
  • Computer equipment ... 3-5 years

When depreciable assets are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gains or losses on disposal are recognised in earnings.

Land and capital work in progress are not depreciated.

ACCOUNTS RECEIVABLE

Accounts receivable are recorded at expected realisable value after providing for bad and doubtful accounts.

INVENTORIES

Inventories are comprised principally of materials for self constructed network assets, critical maintenance spares and customer premises equipment held for rental or resale. They are stated at the lower of cost and net realisable value after due consideration for excess and obsolete items. Cost is determined on a first in first out basis.

LEASES

The Company is lessor of customer premises equipment. Rental income applicable to operating leases, under which substantially all the benefits and risks of ownership remain with the lessor, are taken to revenue as earned.

Additionally the Company is lessee of certain plant, equipment, land and buildings under operating leases. Expenses relating to operating leases are charged against earnings as incurred.

No material finance leases have been entered into as lessor or lessee.



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✨ LLM interpretation of page content

🏭 Telecom Central Limited Financial Statements (continued from previous page)

🏭 Trade, Customs & Industry
7 June 1991
Telecommunications, Financial Reporting, Audit, Accounting Records