New Zealand Gazette – 1995 – No. 139

Page 4535

✨ Financial Statements Notes



27 NOVEMBER NEW ZEALAND GAZETTE 4535

TRANS POWER NEW ZEALAND LIMITED GROUP

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 1995

Assets constructed for the Group are commissioned and transferred from capital work in progress to fixed assets as each facility or operating unit within a facility becomes operational and available for use.

(e) Infrastructure Asset

The infrastructure asset consists of the individual asset components which form the network of transmission lines comprising the National Grid. It is the Group’s intention to maintain the operating capability of the network of transmission lines into the foreseeable future.

Each year the Group prepares an Asset Management Plan (AMP) which documents the philosophies, standards and practices, whereby the operating capability of the Group’s assets is maintained, enhanced and developed. The AMP also provides indicative levels of asset management expenditure required to preserve the operating capability of the infrastructure asset.

Operating capability refers to the output or service capacity of the fixed asset and is determined by reference to attributes such as physical output capacity, associated operating costs, and quality of output. These attributes are assessed at a point in time. Service potential refers to the ability of an asset to provide a satisfactory level of operating capability over a period of time.

The asset management practices outlined in the AMP result in the infrastructure asset having an extremely long life with minimal decline in book value. Having regard to the life and residual value of the infrastructure asset, the Directors consider that the depreciation of the asset is immaterial. Accordingly, no depreciation is charged on the infrastructure asset. Where, in the opinion of the Directors, technological change compromises this view of the economic life of certain assets or components of the infrastructure, those assets are excluded from the infrastructure and depreciated over their estimated remaining economic lives.

Expenditure on the infrastructure asset which increases the operating capability of, or which enhances or develops, the National Grid will be capitalised.

Expenditure incurred to maintain the operating capability of the infrastructure asset in accordance with the AMP is charged as infrastructure maintenance in the Statement of Financial Performance.



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✨ LLM interpretation of page content

🏗️ Notes to the Financial Statements for Trans Power New Zealand Limited (continued from previous page)

🏗️ Infrastructure & Public Works
Financial Statements, Accounting Policies, Revenue, Current Assets, Investments, Fixed Assets, Depreciation, Valuation, Capital Expenditure, Infrastructure Asset, Asset Management Plan, Operating Capability, National Grid