New Zealand Gazette – 1995 – No. 86

Page 2507

✨ Electricity Information Disclosure Regulations



25 AUGUST

NEW ZEALAND GAZETTE

2507

(c) Depreciation

Depreciation has been provided on fixed assets using the straight line method at rates which amortise the cost or valuation, less estimated residual value, over their economic lives.

The main bases are periods not exceeding

Distribution System:

  • Electricity distribution system ... 40 years
  • Meters and load control equipment ... 15 years

Buildings ... 50 years
Cars and vans ... 5 years
Trucks ... 7 years
Plant and equipment ... 10 years
Computer equipment and software ... 3 years

(d) 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 in relation to expected future revenue.

(e) Distinction between capital and revenue expenditure

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

Constructed assets are included in fixed assets as each becomes operational and available for use.

Revenue expenditure is defined as expenditure which restores an asset closer to its original condition and all expenditure incurred in maintaining and operating the fixed assets of the company.

(f) Current assets

Accounts receivable are valued at their expected realisable value. All known bad debts are written off during the financial year. Hire purchase debtors exclude unearned interest (calculated using the "Rule of 78" method).

Stocks are valued at the lower of cost (FIFO or weighted average) and net realisable value, with additional allowances for obsolescence where necessary.

Chargeable work in progress includes direct materials and labour and an allocation of overheads that directly relate to the contract.



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✨ LLM interpretation of page content

🏭 Electricity Information Disclosure Regulations 1994 (continued from previous page)

🏭 Trade, Customs & Industry
Electricity, Financial Statements, Revenue, Expenses, Profit and Loss