3112
NEW ZEALAND GAZETTE
No. 124

ELECTRICITY ASHBURTON LIMITED
ELECTRICITY (INFORMATION DISCLOSURE) REGULATIONS 1994

Reporting Entity

Electricity Ashburton Limited is a company registered under the Co-operative Companies Act 1956.

These financial statements have been prepared for the purpose of complying with the requirements of the Electricity (Information Disclosure) Regulations 1994.

LINE AND ENERGY AND OTHER BUSINESS ACTIVITIES - STATEMENT OF ACCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 1996

Measurement Base

The accounting principles recognised as appropriate for the measurement and reporting of financial performance and financial position on an historical cost basis have been followed.

Accounting Policies Common To All Activities

a) Depreciation

Depreciation has been provided on all tangible fixed assets other than freehold land on the following basis and at the following rates which amortise the cost of the asset over their economic lives.

Fixed Assets:

• concrete 1% straight line
• brick 2% straight line
• wooden 2.5% straight line

Motor Vehicles 18% to 31.2 % diminishing value

Plant & Equipment 10% to 62.5% diminishing value

Depreciation has been charged on a monthly basis on assets acquired and which became operational during the month.

b) Income Tax

Income Tax expense recognises the current obligation on the operating surplus for the year. Deferred Taxation is calculated on the comprehensive basis using the liability method, and arises from amounts of income or expenditure declared for taxation purposes in periods different from those in which they are dealt with in the financial accounts. (see Note 3). Future tax benefits attributable to tax losses or timing differences are only realised when there is virtual certainty of realisation.

c) Valuation of Assets

Land is stated at cost, all other fixed assets at cost less accumulated depreciation.

d) Accounts Receivable

Receivables are shown at book value. All known bad debts have been written off during the year and an estimate for doubtful debts has been made.

e) Inventories

Inventories are valued at the lower of average cost and net realisable value.

f) Goods and Services Tax (GST)

These financial statements have been prepared exclusive of GST with the exception of debtors and creditors which are shown inclusive of GST.

g) Allocation Methodologies

Allocation of costs, revenues, assets and liabilities have been based on the following methods:-

Direct Allocation

All costs, revenues, assets and liabilities that are identifiable to the line business have been allocated. This allocation method is consistent with the Electricity Disclosure Guidelines.

Indirect Allocation

All costs, revenues, assets and liabilities that are not separately identifiable to the line business have been allocated on the following basis:-

% of Staff Employed.

• Components allocated on this basis are personnel costs.

% of Total Assets Employed

• Components allocated on this basis include indirect administration costs, assets and liabilities and corporate management costs.

% of Net Profit Before Taxation

• Components allocated on this basis include bank charges and interest revenue.

% of Actual Resource Provided

• Components allocated on this basis include administration costs and information system resources.

These indirect allocation methods depart from the methodologies detailed in the Electricity Disclosure Guidelines.