✨ Financial Statements
2354 NEW ZEALAND GAZETTE No. 100
(f) Investments
Investments are stated at cost.
The investment in the Tauranga Joint Generation Committee trading as Kaimai Hydropower has been equity accounted. Income received from Kaimai Hydropower is recognised by way of a rebate deducted from electricity purchases.
(g) Revenue Recognition
Revenues from electricity sales include an accrual for units sold but not billed at balance date.
(h) Income Tax
The income tax expense charged to the statement of financial performance includes both the current year’s provision and the income tax effects of timing differences calculated using the liability method.
Tax effect accounting has been applied on a comprehensive basis to all timing differences.
(i) Receivables
Receivables are stated at their estimated realisable value after adequate provision for doubtful debts. Bad debts are written off in the year in which they are identified.
(j) Inventories and Work in Progress
Inventories are valued at the lower of weighted average cost or net realisable value.
Work in progress is valued at cost comprising direct labour, materials and a proportion of production overheads based on a normal level of activity.
(k) Foreign Currencies
There were no material foreign currency transactions during the period or outstanding foreign currency balances at balance date.
(l) Financial Instruments
Interest Rate Risk
The company has various financial instruments to reduce exposure to fluctuations in interest rates. Any resulting differential to be paid or received is accrued as interest rates change and is recognised as a component of operating revenue or expense.
Electricity Price Risk
TrustPower in common with other electricity companies has entered into a number of electricity hedge contracts to reduce the risk from price fluctuations on the electricity spot market. These hedge contracts establish the price at which future specified quantities of electricity are purchased.
Any resulting differential to be paid or received is recognised as a component of operating expenses upon maturity of the contract.
Credit Risk
The company minimises its credit risk by limiting transactions to counterparties with high credit ratings and limiting the amount of funds placed with any parties at one time.
Collateral
The company does not require collateral or other security to support financial instruments with credit risk.
While the company may be subject to credit losses up to the notional principal or contract amounts in the event of non-performance by its counterparties, it does not expect such losses to occur.
Concentration of Credit Risk
The company does not have any significant concentrations of credit risk.
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VUW Te Waharoa —
NZ Gazette 1997, No 100
NZLII —
NZ Gazette 1997, No 100
✨ LLM interpretation of page content
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TrustPower Limited Financial Position Statements
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🏭 Trade, Customs & Industry1 August 1997
Financial Statements, Accounting Policies, Investments, Revenue Recognition, Income Tax, Receivables, Inventories, Work in Progress, Foreign Currencies, Financial Instruments, Interest Rate Risk, Electricity Price Risk, Credit Risk, Collateral, Concentration of Credit Risk