New Zealand Gazette – 1995 – No. 101

Page 3209

✨ Financial Statements Notes



18 SEPTEMBER NEW ZEALAND GAZETTE

3209

Measurement Base

The accounting principles recognised as appropriate for the measurement and reporting of earnings and financial position on an historical cost basis are followed, with the exception that certain fixed assets have been re-valued. Accrual accounting is used to match revenues and expenses. Reliance is placed on the fact that the electricity business activities of EnergyDirect are a going concern.

Specific Accounting Policies

The following specific accounting policies which materially affect the measurement of profit and of financial position have been applied:

(a) Associate Company

This is a company in which EnergyDirect Corporation holds a substantial shareholding of 25 per cent and in whose commercial and financial policy decisions it participates.

The financial statements of the associate company have been reflected in the electricity business activities of the energy business on an equity accounting basis, which shows the Corporation’s share of the associate company’s profits/(losses) in its profit and loss statement and its share of post-acquisition increases or decreases in net assets in the balance sheet.

(b) Fixed Assets

The electricity business activities contain five classes of fixed assets:

  • Electricity Distribution
  • Electricity Generation
  • Motor Vehicles
  • Plant, Tools and Equipment
  • Office Equipment (including computers)

The electricity business of EnergyDirect Corporation Limited expenses all replacement or refurbishment expenditure on the electricity network, with the exception of replacement or improvements to electricity zone substations, transformers and switchgear, which are capitalised. Extensions to the network system and the cost of converting overhead lines to underground cables are capitalised for financial reporting purposes.

All fixed assets are recorded at cost less accumulated depreciation.



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🏭 EnergyDirect Electricity Business Financial Statements Notes (continued from previous page)

🏭 Trade, Customs & Industry
EnergyDirect, Electricity Business, Financial Statements, Accounting Policies, Associate Company, Fixed Assets