✨ Financial Accounting Policies
3170 NEW ZEALAND GAZETTE No. 101
f) Income Tax
The income tax expense charged to the Statement of Financial Performance includes both the current years expense and the income tax effects of timing differences calculated using the liability method.
Tax effect accounting is applied on a partial basis as to all timing differences. A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation.
g) Inventories
Inventories are stated at the lower of cost (calculated on an average cost basis), or net realisable value.
A provision for obsolescence is made for inventory which has not moved within the previous twelve month period. The provision represents the average cost of all inventory items considered obsolete.
Work in progress is valued at net realisable value.
h) Contributions for Subdivisions/Uneconomic Lines
Capital contributions received from customers towards the cost of reticulating new subdivisions and constructing uneconomic lines are offset against the capital cost of the related network assets.
i) Accounting for Goods and Services Tax
All items shown in the financial statements are net of Goods and Services Tax, except for receivables and payables which are shown at the gross amount.
j) Disclosure of methodologies for allocation of costs, revenues, assets and liabilities
The costs, revenues, assets and liabilities of the company have been allocated between the Energy and the Line businesses in accordance with the methodology set out in the Ministry of Commerce Guidelines with the following variations:
(1) Billing and metering costs are allocated between the Line and Energy businesses on a 50:50 basis.
(2) Allocation of sundry accruals, between the Line and Energy businesses, is on the basis of cost of sales.
(3) Allocation of GST, between the Line and Energy businesses, is on the basis of net margin.
(4) Allocation of indirect rates costs, between the Line and Energy businesses, is on the basis of floor area occupied.
(5) Allocation of indirect cleaning costs, between the Line and Energy businesses, is on the basis of floor area occupied.
(6) Allocation of Contracting Division overheads, between the Line and Energy businesses, is based on gross margin from internal/external Contracting sales.
Next Page →
PDF embedding disabled (Crown copyright)
View this page online at:
VUW Te Waharoa —
NZ Gazette 1995, No 101
NZLII —
NZ Gazette 1995, No 101
✨ LLM interpretation of page content
🏭
Financial Statements for CentralPower Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Fixed Assets, Depreciation, Receivables, Accounting Policies, CentralPower Limited