✨ Financial Accounting Policies
2 SEPTEMBER NEW ZEALAND GAZETTE
(h) Financial Instruments
Pursuant to FRS 31 the company estimates that in respect of the reported Financial Instruments, being cash, short term investments and debtors, fair value is equivalent to the carrying amount as stated in the statement of financial position.
The company holds cash in minimal quantities and places short term investments with only registered banks and limits the amount of credit exposure to any one registered bank. Concentrations of credit risk with respect to debtors are limited due to the large number of customers included in the company’s customer base.
Tasman Energy has entered into electricity price hedges with ECNZ for the period 1 April 1996 to 30 September 1996. Under these contracts Tasman Energy has purchased a financial instrument that fixes the price of electricity in different daily and seasonal time slots. On maturity electricity is purchased at the spot price prevailing at the time of consumption. The difference between the price of the hedge and the spot price is then settled between ECNZ and Tasman Energy, regardless of whether any of the electricity for which the hedge was matched was actually purchased or not. The gain or loss on these hedge transactions is not quantifiable at balance date.
(i) Changes In Accounting Policies
There have been no changes in the accounting policies. All policies have been applied on bases consistent with those used in the previous year.
SPECIFIC ACCOUNTING POLICIES - Line Business
(a) Depreciation
Fixed assets have been depreciated in order to write off cost less estimated residual value over their estimated useful life on the following basis:
| Distribution System | 4% SL |
| Buildings (revalued) | 2% SL |
| Plant and Equipment | 20% DV |
| Motor Vehicles | 20% DV |
| Computer Equipment | 25% DV |
Distribution system fixed assets have been depreciated for accounting purposes from the date on which they were commissioned by Tasman Energy.
(b) Capital Contributions from Customers
Capital contributions from customers are credited to deferred income and amortised over the economic life of the asset constructed.
(c) Inventories
The reticulation stock held for the purpose of supporting the existing distribution network is accounted for as a fixed asset.
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VUW Te Waharoa —
NZ Gazette 1996, No 96
NZLII —
NZ Gazette 1996, No 96
✨ LLM interpretation of page content
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Tasman Energy Limited Financial Performance
(continued from previous page)
💰 Finance & RevenueFinancial Instruments, Cash, Investments, Debtors, Credit Risk, Hedging, Electricity Price Hedging, Accounting Policies, Depreciation, Capital Contributions, Inventories