✨ Financial Statements Notes
2846 NEW ZEALAND GAZETTE No. 120
Notes to and Forming Part of the Financial Statements
For the Year Ended 31 March 1997
g) Inventory
Inventory is valued at the lower of historical cost and net realisable value. The weighted average method has been used to determine historical cost. The quantity of gas in pipes has been estimated by Powerco Limited’s gas engineers, and valued at average purchase cost per unit.
h) Investments
Investments are valued at the lower of cost and net realisable value.
i) Revenue Recognition
Revenue from the sale of energy and value added services is recognised when invoices are issued plus an accrual is made for unread meters at balance date.
j) Financial Instruments
In the ordinary course of business the company enters into energy purchase instruments in conjunction with its associate company. These are used to manage the market price risk of the company’s major operating cost. The company values these transactions at the lower of original cost and market value.
k) Basis of Allocation to Business Units.
In general the Ministry of Commerce guidelines for allocation of expenditure have been applied. Deviations from the guidelines have been used where assumptions made in the guidelines have not held true for Powerco Limited, and are as follows:
The assumption that energy alone interfaces with electricity consumers does not hold for Powerco Limited. Customer related expenditures are allocated according to the number of customers attributable to each business.
Overhead costs that are integral parts of operating each business have been allocated according to the direct expenditure incurred by each business.
Other corporate income has been allocated based on the relevance of such income to the business units. This change in methodology has been reflected in the 1996 comparative amounts.
Changes in Accounting Policies
As indicated above in note (f) the company has changed its policy on deferred tax recognition in the current year. The effect of this change in policy has been to:
i) record a deferred tax liability in the statement of financial position as at 31 March 1997 of $16.123 million. A corresponding amount has been offset in the asset revaluation reserve, as shown in note 4.
ii) record a future income tax benefit of $390,338 being the taxation effect of other timing differences. A corresponding amount has been recognised in the taxation expense reported in the statement of financial performance, as shown in note 14.
There have been no other changes to accounting policies. All policies have been applied on a basis consistent with prior years.
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VUW Te Waharoa —
NZ Gazette 1997, No 120
NZLII —
NZ Gazette 1997, No 120
✨ LLM interpretation of page content
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Powerco Limited Statement of Movements in Equity
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🏭 Trade, Customs & Industry31 March 1997
Financial Statements, Equity, Operating Surplus, Revaluation, Deferred Taxation, Shareholder Contributions, Share Repurchase, Dividends, Reserves Transfers, Fixed Assets, Depreciation, Receivables, Income Tax