New Zealand Gazette – 1996 – No. 91

Page 2379

✨ Financial Accounting Policies



26 AUGUST NEW ZEALAND GAZETTE 2379

During the year ended 31 March 1996 a reallocation was made between cost and accumulated depreciation for plant and equipment and motor vehicles. This adjustment did not affect the overall book value of these assets.

d) Depreciation

Depreciation is provided on a straight line basis on all fixed assets other than freehold land, at rates calculated to allocate the assets' cost or valuation less estimated residual value, over their estimated useful lives.

Major useful lives are:

  • Network lines and equipment 35 to 45 years
  • Freehold buildings 25 to 50 years
  • Plant and equipment 3 to 15 years
  • Motor vehicles 3 to 10 years

e) Receivables

Trade, non-trade and hire purchase receivables are stated at their net estimated realisable value. The valuation is net of a general provision maintained for doubtful debts which could be expected to arise in subsequent accounting periods, provision for which is made from operating surplus. All known losses are charged to the Statement of Financial Performance in the period in which it becomes apparent that the debts are not collectible.

Hire Purchase receivables include unearned interest. Total interest is included at the time the contract is signed and is allocated over the term of the contract using the 'Rule of 78' method.

f) Income Tax

The income tax expense charged to the Statement of Financial Performance includes both the current year's expense and the income tax effects of timing differences calculated using the liability method.

Tax effect accounting is applied on a partial basis as 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.

g) Inventories

Inventories are stated at the lower of cost (calculated on an average cost basis), or net realisable value.



Next Page →

PDF embedding disabled (Crown copyright)

View this page online at:


VUW Te Waharoa — PDF NZ Gazette 1996, No 91


NZLII — PDF NZ Gazette 1996, No 91




✨ LLM interpretation of page content

🏭 CentralPower Limited Financial Performance (continued from previous page)

🏭 Trade, Customs & Industry
Financial Statements, Revenue, Expenses, Net Profit, Taxation, Energy, Lines, Accounting Policies, Depreciation, Receivables, Income Tax, Inventories