✨ Financial Notes
3448 NEW ZEALAND GAZETTE No. 108
Wairarapa Electricity Limited and Subsidiary Companies
Notes to the Accounts (continued)
For each fixed asset having a construction period of greater than 12 months, interest cost incurred during the period of time that is required to complete and prepare the fixed asset for its intended use is capitalised as part of the total cost.
Gains and losses on disposal of fixed assets are taken into account in determining the operating result for the year.
(vi) Distribution System Maintenance
A maintenance programme sufficient to maintain the distribution system indefinitely is undertaken on a continuous basis. All maintenance expenditure is charged to the Consolidated Income and Appropriation Statement as incurred in accordance with the maintenance programme. Maintenance expenditure includes all expenditure items which restore the distribution system to its original condition without enhancing the system’s operational capacity. Provision is made for deferred maintenance where applicable.
(vii) Electricity Sales
All amounts actually billed to customers net of prompt payment discount during the year are included as electricity sales. Provision is made and included in electricity sales for the estimated value of electricity used but not billed at year end.
(viii) Income Tax
The income tax expense charged to the Consolidated Statement of Income and Appropriation includes both current and deferred tax and is calculated after allowing for non-assessable income and non-deductible costs.
Deferred taxation, calculated using the comprehensive basis under the liability method, is accounted for in respect of those timing differences expected to reverse in the foreseeable future. A future tax benefit is recognised only if there is virtual certainty realisation.
(ix) Financial Instruments
Revenues and expenses from financial instruments are recognised using accrual accounting.
(x) Construction Contracts
Construction contracts are stated at cost plus attributable profit to date less progress billings. Cost includes all costs directly related to specific contracts and an allocation of general overhead expenses incurred by the group’s contract operations. Profit is based on percentage of completion of each contract and is not recognised unless the outcome of the contract can be reliably estimated. Losses are taken to the Consolidated Income and Appropriation Statement in the period in which they are identified.
(xi) Allocations to Business Units
Costs, revenues, assets and liabilities relating to the provision of contracting services to external parties have been allocated to ‘energy and other business’.
Merger costs have been allocated according to the share capital attributable to each business.
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VUW Te Waharoa —
NZ Gazette 1995, No 108
NZLII —
NZ Gazette 1995, No 108
✨ LLM interpretation of page content
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Notes to the Accounts of Wairarapa Electricity Limited and Subsidiary Companies
(continued from previous page)
💰 Finance & RevenueAccounting Policies, Fixed Assets, Interest Capitalisation, Disposal Gains, Maintenance, Distribution System, Electricity Sales, Income Tax, Deferred Taxation, Financial Instruments, Construction Contracts, Business Unit Allocations