✨ Financial Statements Accounting Policies
30 NOVEMBER NEW ZEALAND GAZETTE 3829
Forward exchange contracts entered into as a hedge of foreign currency transactions (other than offshore funding activities) are not revalued at balance date.
Financial instruments entered into with no corresponding underlying position are accounted for on a mark to market basis and movements taken to the statement of financial performance as they accrue.
(xiv) Comparative figures
Prior year comparative figures have not been included as they are not required by the Regulations.
(xv) Distinction between capital and revenue expenditure
Capital expenditure is defined as all expenditure on the creation of a new asset, and any expenditure which results in a significant improvement of the original function of a total existing asset.
Revenue expenditure is defined as expenditure which restores an asset to its original condition and all expenditure incurred in maintaining and operating the Corporation.
(xvi) Hydrology reserve
Variances against planned fuel costs, to the extent that they have arisen from hydrological conditions, are applied to the hydrology reserve.
The Corporation plans to increase the reserve progressively to the level which, based on historical trends, is sufficient to absorb the cost of two successive dry years.
Movements to and from the reserve are an appropriation, rather than a charge against the statement of financial performance.
(xvii) Employee entitlements
Provision has been made for annual, long service and retirement leave entitlements estimated to be payable to employees on the basis of statutory and contractual requirements. The provision for long service and retirement leave is based on an actuarial estimate.
(xviii) Insurance
The Corporation has fixed assets valued at approximately $4.2 billion which are predominantly concentrated at power station locations and have the potential to sustain major losses through damage to plant and resultant consequential costs.
To minimise the financial impact of such exposures, the major portion of the risk is transferred to insurance companies by taking out appropriate policies.
Any uninsured loss is charged to the statement of financial performance in the year in which the loss is incurred.
Claims expenditure is recorded after making provision for claims notified but not yet settled and for the estimated cost of claims incurred but not yet reported until after balance date. Claims expenditure is also net of any other claims related recoveries.
(e) Changes in accounting policies
There have been no changes in accounting policies during the 12 month period. All policies have been applied on bases consistent with those used in previous years.
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VUW Te Waharoa —
NZ Gazette 1994, No 128
NZLII —
NZ Gazette 1994, No 128
✨ LLM interpretation of page content
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Electricity Corporation of New Zealand Limited Financial Statements
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