✨ Financial Statements Notes
(d) 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 to the original function of an existing asset.
Revenue expenditure is defined as expenditure which maintains an asset in working condition, and expenditure incurred in maintaining asset service performance, and the operation of the Company.
(e) Depreciation
In accordance with Sec 14.(5)(b) of the Electricity (Information Disclosure) Regulations 1994, no depreciation has been written off Network Assets, these having been accounted for on a Renewal Accounting basis. Other Assets have been depreciated on a straight line basis.
(f) Receivables:
Receivables are stated at their estimated realisable value.
(g) Income Tax:
The income tax expense charged against the profit for the year is the estimated liability calculated at 33 cents in the dollar in respect of that profit.
(h) Work in Progress:
The cost of work in progress includes the cost of direct material and direct labour used in putting replacement and new systems in their present location and condition.
(i) Goods and Services Tax
These Accounts have been prepared on a GST exclusive basis with the exception of Sundry Debtors and Creditors which are GST inclusive.
CHANGES IN ACCOUNTING POLICIES
These Accounts are prepared using modified Renewal Accounting methodology and are for the sole purpose of complying with the requirements of the Electricity (Information Disclosure) Regulations 1994. As a consequence these accounts are not comparable with the Company’s published consolidated financial statements.
NOTE 2. TAXATION
| 1996 | 1995 | |
|---|---|---|
| Net Profit before taxation | $2,972,218 | $3,377,640 |
| Prima facie tax at 33% | $980,832 | $1,114,621 |
The potential tax effect of unrecognised timing differences is a deferred tax asset of $2,885,332. This has not been recognised as it is not expected to crystallise in the foreseeable future.
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VUW Te Waharoa —
NZ Gazette 1996, No 81
NZLII —
NZ Gazette 1996, No 81
✨ LLM interpretation of page content
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Notes to and Forming Part of the Line Business Financial Statements for the Year Ended 31 March 1996
(continued from previous page)
🏭 Trade, Customs & Industry27 June 1996
Financial Statements, Accounting Policies, Capital Expenditure, Revenue Expenditure, Depreciation, Receivables, Income Tax, Work in Progress, GST, Taxation