✨ Financial Accounting Policies
4 SEPTEMBER NEW ZEALAND GAZETTE 2677
c) Fixed Assets
The capital value of fixed assets is the value at either Optimal Deprival Value (ODV), Optimised Depreciated Replacement Cost (ODRC) on previous mergers of Taranaki Energy Limited, the amalgamating company, or cost.
ODV, and ODRC Valuations were completed by KPMG Peat Marwick, independent consultants, at the time of the establishment of Taranaki Energy Limited. Assets recorded at ODV and ODRC value are the following assets:
- Electricity and gas distribution networks, formerly part of New Plymouth Energy
- Gas distribution network formerly part of Hawera Gas Company assets.
Network distribution assets other than those above and any additions to fixed assets since amalgamation are recorded at cost.
d) Depreciation of Fixed Assets
Depreciation rates for major classes of asset are:
| Asset Class | Depreciation Rate |
|---|---|
| Land | Not Depreciated |
| Buildings | 1% SL |
| Furniture and Fittings | 10% to 20% DV |
| Office Equipment | 10% to 33% DV |
| Motor Vehicles | 20% DV |
| Network Systems and Generation | 2% SL and 5% to 14.4% DV |
e) Receivables
Accounts receivable are valued at expected realisable value, after providing for doubtful debts. All known bad debts have been written off during the period under review.
f) Income Tax
The income tax expense charged to the Statement of Financial Performance includes both the current year’s expense and the income tax effect of timing differences using the liability method.
Tax effect accounting is applied on a partial basis as to timing differences expected to reverse in the foreseeable future. A debit balance in the deferred tax account arising from timing differences or income tax losses, is only recognised if there is virtual certainty of their realisation.
g) Inventory
Inventory is valued at the lower of historical cost and net realisable value. The weighted average method has been used to determine historical cost. The quantity of gas in pipes has been estimated by Powerco Limited’s gas engineers, and valued at average purchase cost per unit.
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VUW Te Waharoa —
NZ Gazette 1996, No 104
NZLII —
NZ Gazette 1996, No 104
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