✨ Financial Statements Notes
27 AUGUST NEW ZEALAND GAZETTE 2503
WAITOMO ENERGY SERVICES LIMITED
Line Business Activity
Notes to the Financial Statements
For the Year Ending 31st March 1997
(e) Inventory
Stocks are stated at the lower of cost, determined on an average cost basis, or net realisable value.
(f) Investments
Short term deposits and shares are stated at the lower of cost or estimated realisable value.
(g) Taxation
Income tax expense is recognised on the operating surplus before taxation adjusted for permanent differences between taxable and accounting income. The tax effect of all timing differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is recognised in the statement of financial position as a future tax benefit or a provision for deferred tax. The future tax benefit or provision for deferred tax is stated at the income tax prevailing at balance date.
Future tax benefits are not recognised unless realisation of the asset is virtually certain.
The Company uses the liability method of accounting for deferred taxation at the income tax rate prevailing at balance date and applies this on a comprehensive basis.
(h) Financial Instruments
The Company has entered into transactions using financial instruments as part of its ongoing business activities. These transactions are accounted for on the basis of the accounting policies set out above. The Company also enters into off balance sheet financial instruments in electricity purchase hedges.
(i) Principles of Consolidation
The accounts of Economic Energy Ltd (previously Task Consultancy Ltd) have been consolidated in 1997 using the purchase method. Consolidation has only been performed for the period following the acquisition of 100% of the shares. Prior to this time the equity method of consolidation has been used.
(j) Changes in Accounting Policies
In order to bring published statements in line with the Information Disclosure Regulations, infrastructural accounting has been adopted for the distribution system assets. This has lowered the depreciation charged on distribution system assets, and increased distribution maintenance costs.
Distribution assets which replace existing assets and have no material impact on odv value are expensed in their year of purchase. The previous policy of capitalising significant pole replacements has ceased.
The effect of this has been to decrease Network Depreciation by $585,120 and increase Network System Costs by $309,274 a net increase in profit of $275,846.
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VUW Te Waharoa —
NZ Gazette 1997, No 107
NZLII —
NZ Gazette 1997, No 107
✨ LLM interpretation of page content
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Notes to the Financial Statements for Waitomo Energy Services Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Accounting Policies, Inventory, Investments, Taxation, Financial Instruments, Consolidation, Accounting Changes