New Zealand Gazette – 1995 – No. 108

Page 3433

✨ Financial Statements Notes



29 SEPTEMBER NEW ZEALAND GAZETTE

NOTES TO THE FINANCIAL STATEMENTS

(e) Depreciation

Depreciation of tangible assets is provided on a straight line basis so as to allocate the cost or valuation of the fixed assets over their estimated economic lives after due allowance has been made for their expected residual value. Additions are depreciated from the date of acquisition or commencement of use.
Estimated economic lives of assets are as follows:-

  • Buildings : 40 - 100 years
  • Distribution System : 10 - 50 years
  • Distribution Assets (pre 1987) : 20 - 30 years
  • Furniture and Equipment : 5 - 10 years
  • Motor Vehicles : 5 years
  • Plant and Equipment : 5 - 10 years

(f) Investments

Investments are valued at cost. Where investments are revalued, the change in value is included in the profit statement. Investments in subsidiaries are valued at cost.

(g) Current Assets

Accounts Receivable are valued at expected net realisable value. Inventory is valued at the lower of cost, determined on a weighted average basis, or net realisable value.

(h) Taxation

The income tax expense charged against the surplus for the year is the estimated liability in respect of that surplus and is calculated after allowance for permanent differences.
The Company uses the liability method of accounting for deferred taxations and applies this on a comprehensive basis. Future tax benefits attributable to tax losses or timing differences are only recognised when there is virtual certainty of realisation.

(i) Leases

The Company leases certain plant and equipment and land and buildings. Expenses relating to operating leases are charged against earnings as incurred. The lease liabilities are disclosed.

The company had no finance leases during the period of the report.

(j) Research and Development Costs

Research and development costs are expensed in the period incurred. Development costs are deferred where future benefits are expected to exceed those costs. Deferred development costs are amortised over future periods on a basis related to expected future revenue.



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✨ LLM interpretation of page content

🏭 Notes to the Financial Statements for Eastland Energy Limited (continued from previous page)

🏭 Trade, Customs & Industry
Accounting Policies, Financial Statements, Eastland Energy Limited, Depreciation, Investments, Current Assets, Taxation, Leases, Research and Development Costs