✨ Financial Statements
3014 NEW ZEALAND GAZETTE No. 128
TRANSALTA NEW ZEALAND LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (continued)
FOR THE TWELVE MONTHS ENDED 31 MARCH 1997
1. STATEMENT OF ACCOUNTING POLICIES (continued)
Specific Accounting Policies
(a) Valuation of Assets at 1 October 1996
The assets of the Company on amalgamation of the predecessor companies EnergyDirect Corporation Limited and Capital Power Limited at 1 October 1996 were recorded at cost. The bases used to arrive at cost were as follows:
- Electricity network distribution assets at amounts which approximate Optimised Deprival Value (ODV).
- Energy supply assets at an amount which reflects a conservative estimate of the assessed value of future net revenues from long term customers connected to the network.
- All other assets and liabilities at a cost based on net current value.
(b) Basis of Consolidation
The Financial Statements include those of the Company and its subsidiaries which are consolidated using the purchase method. The results of any subsidiaries acquired or disposed of during the year are consolidated from the effective date of acquisition and up to the effective dates of disposal. All inter-entity transactions, profits and balances are eliminated on consolidation.
(c) Associate Companies
The Financial Statements incorporate the Group’s interest in associate companies, which are accounted for using the equity method, where the Group is in a position to exercise significant influence and where the interest is intended to be held as a long term investment. The Group’s share of operating surplus is recognised from the effective date of acquisition until the effective date of disposal.
(d) Joint Venture
The Financial Statements incorporate the Group’s interest in joint ventures which are accounted for using the line-by-line method of consolidation on a proportionate basis.
(e) Income Recognition
Electricity sales represent customer usage during the financial period. Allowance is made in the sales of electricity for unbilled sales being unread meters and unbilled line charges as at balance date.
(f) Valuation of Fixed and Long Term Assets
Assets are stated at cost.
Electricity network distribution assets are stated at their cost at acquisition, which on amalgamation approximates the ODV. The ODV is the lower of a network’s Optimised Depreciated Replacement Cost (ODRC) and its Economic Value (EV). The ODRC of an asset represents the cost of the most efficient asset capable of performing the same functions, depreciated for the age of the asset being valued. The EV of an asset is the greater of the net realisable value of that asset or the net present value of the future earnings from that asset.
Fixed and Long Term Assets are depreciated on a straight line basis. Depreciation is provided on all fixed assets at rates calculated to allocate the cost of acquisition, less estimated residual value, over their estimated useful lives. Fixed and Long Term assets comprise:
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VUW Te Waharoa —
NZ Gazette 1997, No 128
NZLII —
NZ Gazette 1997, No 128
✨ LLM interpretation of page content
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Financial Statements of TransAlta New Zealand Limited
(continued from previous page)
🌾 Primary Industries & Resources28 August 1997
Electricity, Financial Statements, Information Disclosure, TransAlta