New Zealand Gazette – 1992 – No. 97

Page 2225

✨ Financial Statements Notes



29 JUNE
NEW ZEALAND GAZETTE
2225

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
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 both operating and finance leases. Expenses relating to operating leases are charged against earnings as incurred. Finance leases, which effectively transfer to the entity substantially all the risks and benefits of ownership of the leased item, are capitalised at the present value of the minimum lease payments. The leased assets and corresponding liabilities are disclosed and the leased assets are amortised over the period the entity is expected to benefit from their use.

No material finance leases have been entered into as lessor.



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✨ LLM interpretation of page content

🏭 Telecom Central Limited Consolidated Balance Sheet (continued from previous page)

🏭 Trade, Customs & Industry
27 May 1992
Telecommunications, Financial Statements, Accounting Policies, Depreciation, Revenue Recognition, Fixed Assets, Inventories, Leases