✨ Financial Accounting Policies
2584 NEW ZEALAND GAZETTE No. 110
(g) Inventories
Stocks and inventories are valued at the lower of cost (FIFO or weighted average) and net realisable value, with additional allowances for obsolescence where necessary.
Chargeable work in progress includes direct materials and labour and an allocation of overheads that directly relate to the contract.
(h) Fixed assets
Fixed assets are revalued on a cyclic basis at least once every three years by independent valuers to net current value. Any subsequent fixed asset additions are initially recorded at cost until the next revaluation.
(i) Income tax
The income tax expense charged against the surplus for the year is the estimated liability in respect of that surplus and is calculated after allowance for permanent differences and timing differences not expected to reverse in future periods. This is the partial basis for the calculation of deferred tax.
Tax effect accounting is applied on a partial basis using the liability method. 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.
(j) Employee entitlements
Provision is made in respect of the company’s liability for annual and long service leave. The annual leave liability has been calculated on an actual entitlement basis at current rates of pay. The long service leave liability has been assessed on an actuarial basis.
(k) Internal sales and intercompany balances
Due to the required separation for disclosure purposes of the other electricity-related businesses from the line business, internal sales between these categories have been reported as actual sales and purchases, instead of being eliminated.
Balances payable and receivable between the two categories have also been stated at the gross levels, instead of being eliminated.
Changes in Accounting Policies
There have been no changes in accounting policies. The policies have been applied on bases consistent with those used in previous years.
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VUW Te Waharoa —
NZ Gazette 1997, No 110
NZLII —
NZ Gazette 1997, No 110
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Southpower Limited Information Disclosure under Electricity Regulations
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