New Zealand Gazette – 1995 – No. 118

Page 3697

✨ Accounting Policies



20 OCTOBER NEW ZEALAND GAZETTE 3697

4.0 COSTS AND REVENUE

Costs and Revenue are those directly attributable to the Line Business of The Power Company.

5.0 FIXED ASSETS

At 31 March 1995 all assets including Network Assets are recorded at cost less accumulated depreciation.

6.0 DISTINCTION BETWEEN CAPITAL AND REVENUE EXPENDITURE

Capital expenditure is defined as all expenditure on the creation of a new asset and any expenditure which results in a significant improvement to the original function of an existing asset.

Revenue expenditure is defined as expenditure which maintains an asset in working condition, and expenditure incurred in maintaining the service performance and operation of the Company.

7.0 DEPRECIATION

Fixed assets are depreciated on the basis of cost price less estimated residual value over the period of their estimated useful life.

Rates used are:

  • Buildings ... 1% SL - 4% DV
  • Furniture, Fittings & EDP Equipment ... 10% DV - 50% DV
  • Motor Vehicles ... 20% DV - 25% DV
  • Network Assets ... 1% SL - 22% DV

8.0 RECEIVABLES

Receivables are stated in their estimated reliable value.

9.0 INCOME TAX

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

10.0 WORK IN PROGRESS

The cost of work in progress includes the cost of direct material and direct labour used in putting replacement and new systems in their present location and condition.

11.0 GOODS AND SERVICES TAX

These accounts have been prepared on a GST exclusive basis with the exception of Sundry Debtors and Creditors which are GST inclusive.



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✨ LLM interpretation of page content

🏭 Statement of Accounting Policies for The Power Company Limited (continued from previous page)

🏭 Trade, Customs & Industry
Accounting Policies, Financial Statements, Line Business, Electricity, Regulations