✨ Financial Statements Notes
1 SEPTEMBER NEW ZEALAND GAZETTE 2735
POWER NEW ZEALAND LIMITED
(d) Income Tax
The group adopts the liability method of tax-effect accounting whereby the income tax expense shown in the statement of financial performance is based on the operating surplus before tax adjusted for any permanent differences.
Deferred taxation, using the liability method, is accounted for on the comprehensive basis. Future tax benefits attributable to tax losses or timing differences are recognised only when there is virtual certainty of realisation. The major timing differences relate to depreciation.
(e) Fixed Assets
Fixed Assets Other Than Distribution Network System Assets
All fixed assets are initially recorded at cost.
Distribution Network System Assets
The Regulations provide a choice between either revaluing the Distribution Network System Assets or leaving them at their book value. Power New Zealand Limited has elected to revalue them to their ODV valuation as at 31 March 1995.
This valuation method allows for assets to be restated at their replacement cost less an appropriate provision for depreciation. Comparison is then made between their depreciated value and their Economic Value being the sum of future cash flows.
Should this result in a lower figure then the Economic Value is substituted.
Power New Zealand Limited engaged independent consultants, Coopers and Lybrand, to undertake the ODV valuation which appears in the Statement of Financial Position and notes thereto.
(f) Depreciation
Depreciation of fixed assets, other than freehold land, has been charged at rates calculated to allocate on a straight-line basis either the cost of the asset, or the valuation, less estimated residual value, over their estimated useful lives as follows:
(a) Freehold Buildings 1 - 2%
(b) Reticulation System 2.5% - 10%
(c) Plant, Vehicles and Equipment 10% - 50%
(g) Accounts Receivable
Accounts Receivable are stated at their estimated net realisable value.
Receivables include an assessment for unbilled sales of electricity at balance date.
(h) Inventories
Inventories are stated at the lower of cost and net realisable value.
In arriving at net realisable value an allowance is made for deterioration and obsolescence.
Construction contracts are stated at cost plus attributable profit to date (based on percentage of completion of each contract), less progress billings.
(i) Research and Development Expenditure
Research and development expenditure is charged to expense as incurred.
(j) Revenue Recognition
Income from electricity sales includes an estimated amount for accrued electricity sales from meters unread at balance date.
Changes in Accounting Policies
There have been no changes in accounting policies from those previously applied.
Next Page →
PDF embedding disabled (Crown copyright)
View this page online at:
VUW Te Waharoa —
NZ Gazette 1995, No 91
NZLII —
NZ Gazette 1995, No 91
✨ LLM interpretation of page content
💰
Notes to and Forming Part of the Financial Statements for the Year Ended 31 March 1995
(continued from previous page)
💰 Finance & RevenueAccounting Policies, Taxation, Fixed Assets, Depreciation, Accounts Receivable, Inventories, Research and Development, Revenue Recognition