✨ Financial Statements Notes
2580 NEW ZEALAND GAZETTE No. 99
Power New Zealand Limited
Deferred taxation, using the liability method, is accounted for on the comprehensive basis.
Future tax benefits attributable to tax losses or timing differences are recognised only when there is virtual certainty of realisation. The major timing differences relate to depreciation.
(b) Fixed Assets
Fixed Assets Other Than Distribution Network System Assets
All fixed assets are initially recorded at cost.
Distribution Network System Assets
The Distribution Network System Assets have been revalued to their ODV valuation as at 31 March 1996.
This valuation method allows for assets to be restated at their replacement cost less an appropriate provision for depreciation. Comparison is then made between their depreciated value and their Economic Value being the sum of future cash flows.
Should this result in a lower figure then the Economic Value is substituted.
Power New Zealand Limited engaged independent consultants, Coopers and Lybrand, to undertake the ODV valuation which appears in the Statement of Financial Position and notes thereto.
(c) Depreciation
Depreciation of fixed assets, other than freehold land, has been charged at rates calculated to allocate on a straight-line basis either the cost of the asset, or the valuation, less estimated residual value, over their estimated useful lives as follows:
(i) Freehold Buildings 1 - 2%
(ii) Reticulation System 1.4% - 10%
(iii) Plant, Vehicles and Equipment 10% - 50%
(d) Accounts Receivable.
Accounts Receivable are stated at their estimated net realisable value.
Receivables include an assessment for unbilled sales of electricity at balance date.
(e) Inventory
Inventory is stated at the lower of cost and net realisable value.
In arriving at net realisable value an allowance is made for deterioration and obsolescence.
(f) Research and Development Expenditure
Research and development expenditure is charged to expense as incurred.
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VUW Te Waharoa —
NZ Gazette 1996, No 99
NZLII —
NZ Gazette 1996, No 99
✨ LLM interpretation of page content
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Notes to Financial Statements of Power New Zealand Limited
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