New Zealand Gazette – 1995 – No. 101

Page 3210

✨ Financial Statements Notes



3210 NEW ZEALAND GAZETTE No. 101

Capital contributions from consumers towards the cost of reticulating new subdivisions and constructing lines are deducted from the cost of the asset to which they relate and the net amount is capitalised to electricity distribution.

During the year, distribution stocks of electricity meters, transformers and switchgear were reclassified to electricity distribution fixed assets from inventories to more appropriately reflect these items as network assets.

(c) Depreciation
Depreciation has been calculated to allocate the cost of assets over their estimated useful lives at the following rates:

  • Distribution - 4% of cost price
  • Generation - 4% of cost price
  • Plant, tools and equipment - 20% diminishing value
  • Motor vehicles - 20% diminishing value
  • Office equipment (including computers) - 20% diminishing value

(d) Receivables
Receivables are stated at their estimated net realisable value, after making a general provision for doubtful debts.

Receivables include an assessment for unbilled sales of electricity at balance date.

(e) Hire Purchase Receivables
Hire purchase debtors include unearned interest. Total interest is included at the time the contract is made and is allocated over the term of the agreement using the "Rule of 78" method. An adjustment is made at balance date to separately disclose unearned income on hire purchase as a current liability.

(f) Inventories
Inventories are valued at the lower of cost and net realisable value. Due allowance has been made for obsolete and damaged inventory. Cost has been determined as follows:

  • Electricity Distribution Reticulation Inventory : Weighted average cost
  • Electricity Appliance Inventory : Specific identified cost


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