✨ Financial Statements Notes
4548 No. 173
NEW ZEALAND GAZETTE
TRANS POWER NEW ZEALAND LIMITED GROUP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1996
The asset management practices outlined in the AMP result in the infrastructure asset having an extremely long life with minimal decline in book value. Having regard to the life and residual value of the infrastructure asset the Directors consider that the depreciation of the asset is immaterial. Accordingly, no depreciation is charged on the infrastructure asset. Expenditure incurred to maintain the operating capability of the infrastructure asset in accordance with the AMP is treated as an expense in the Statement of Financial Performance. This treatment differs from standard accounting for fixed assets which allocates the cost of the asset over its estimated economic life and capitalises any expenditure that extends the asset’s life.
Expenditure on the infrastructure asset that enhances or develops the operating capability of the asset is capitalised.
Service potential refers to the ability of the asset to provide a satisfactory level of operating capability into the future. If, in any year, the level of expenditure required to maintain the operating capability of the infrastructure asset is insufficient to preserve the service potential of the asset, the net book value of the infrastructure asset is reduced and the Statement of Financial Performance is charged with this shortfall. This is called the "infrastructure asset service potential adjustment". Expenditure in subsequent periods to redress this shortfall and bring the infrastructure asset back to the requisite level of service potential increases the net book value of the infrastructure asset.
(h) Depreciation
Depreciation of non infrastructure fixed assets is calculated using the straight line method to allocate the cost or valuation of the fixed assets over their expected useful lives, after due allowance for their expected residual value. The estimated economic lives are as follows:
| Freehold buildings | 20-25 years |
| Substations | 40-55 years |
| HVDC link | 30 years |
| HVDC leased assets | 30 years |
| Communications | 10-25 years |
| Minor assets | 3-10 years |
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VUW Te Waharoa —
NZ Gazette 1996, No 173
NZLII —
NZ Gazette 1996, No 173
✨ LLM interpretation of page content
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Notes to the Financial Statements for Trans Power New Zealand Limited
(continued from previous page)
🏭 Trade, Customs & Industry5 November 1996
Financial Statements, Accounting Policies, Revenue, GST, Current Assets, Investments, Fixed Assets, Modified Historical Cost Measurement, Depreciation, Infrastructure Asset, Asset Management Practices