✨ Financial Accounting Policies
23 SEPTEMBER NEW ZEALAND GAZETTE 3151
(e) Fixed Assets
Fixed assets are valued at cost or valuation less accumulated depreciation.
The cost of fixed assets created or enhanced (self-constructed assets) is calculated as total direct costs incurred plus an appropriate proportion of indirect expenses. Freehold land and buildings are subsequently revalued on a cyclical basis with no individual fixed asset being included at a valuation undertaken more than three years previously. Valuations are at net current value as determined by an independent valuer.
(f) Distinction between Capital and Revenue Expenditure
Capital expenditure is defined as all expenditure on the creation of a new asset and any expenditure which results in a significant improvement of the original function of a total asset. Revenue expenditure is defined as expenditure which restores an asset to its original condition, or renews distribution network lines without increasing capacity, and all expenditure incurred in maintaining and operating the assets.
(g) Depreciation
Depreciation of tangible assets is provided on a straight line basis so as to allocate the cost or valuation of the fixed assets over their estimated economic lives after due allowance has been made for their expected residual value. Additions are depreciated from the date of acquisition or commencement of use. Estimated economic lives of assets are as follows -
Buildings : 40 - 100 years
Distribution System : 10 - 50 years
Distribution Assets (pre 1987) : 20 - 30 years
Furniture and Equipment : 5 - 10 years
Motor Vehicles : 5 years
Plant and Equipment : 5 - 10 years.
(h) Investments
Investments are valued at cost.
(i) Current Assets
Accounts Receivable are valued at expected net realisable value. Inventory is valued at the lower of cost, determined on a weighted average basis, or net realisable value.
(j) Taxation
The income tax expense charged against the surplus for the year is the estimated liability in respect of that surplus and is calculated after allowance for permanent differences.
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VUW Te Waharoa —
NZ Gazette 1996, No 126
NZLII —
NZ Gazette 1996, No 126
✨ LLM interpretation of page content
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Accounting Policies for Fixed Assets, Capital/Revenue Expenditure, Depreciation, Investments, Current Assets, and Taxation
(continued from previous page)
💰 Finance & RevenueAccounting Policies, Fixed Assets, Capital Expenditure, Revenue Expenditure, Depreciation, Investments, Current Assets, Taxation, Eastland Energy Limited