New Zealand Gazette – 1996 – No. 107

Page 2773

✨ Financial Statements Notes



6 SEPTEMBER NEW ZEALAND GAZETTE 2773

HAWKE’S BAY POWER DISTRIBUTION LIMITED AND SUBSIDIARY

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 1996 (Continued)

e) Work in Progress
Work in progress includes the cost of materials and other direct and indirect costs incurred as at balance date.

f) Recognition of Income
Sales of electricity are determined on the basis of actual and interim amounts billed during the year, together with an accrual for unbilled sales as at balance date.

g) Income Tax
The income tax expense charged to the statement of financial performance includes both the current year’s provision and the income tax effects of timing differences calculated using the liability method.

Tax effect accounting has been applied on a comprehensive basis to all timing differences. A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation.

Changes in Accounting Policies

From 1 April 1995 the Company changed its depreciation policy to that described in b) above. Previously fixed assets had been depreciated on the following basis -

  • Pre 31 March 1987 4% of cost price
  • Post 1 April 1987 5-10% diminishing value
    Buildings 1% of cost price
    Motor Vehicles 20% diminishing value
    Plant & Equipment 10-20% diminishing value

The reason for the change was to allocate more accurately the depreciation charge on assets over the period of their useful lives.

The effect of the change has reduced the depreciation charge in the Lines Business Statement of Financial Performance by $1,735,000 and increased depreciation in the Other Businesses Statement of Financial Performance by $18,000. Respective fixed asset book values have increased accordingly.

There were no other changes in accounting policies during the period.



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🏭 Hawke's Bay Power Distribution Ltd Financial Statements (continued from previous page)

🏭 Trade, Customs & Industry
6 September 1996
Electricity, Financial Statements, Information Disclosure, Hawke's Bay Power Distribution Ltd