✨ Financial Statements
3170 NEW ZEALAND GAZETTE No. 136
CENTRALPOWER LIMITED
Line Business and Electricity Retailing
Notes to the Financial Statements (cont.)
For the Year Ended 31 March 1997
d) Depreciation
Depreciation is provided on a straight line basis on all tangible fixed assets other than freehold land, at rates calculated to allocate the assets' cost or valuation, less estimated residual value, over their estimated useful lives.
Major depreciation rates are:
- Buildings 25 to 50 years
- Network 35 to 45 years
- Motor vehicles 3 to 10 years
- Plant and equipment 3 to 15 years
Depreciation rates for network assets are based upon Ministry of Commerce estimates for useful lives. Revised useful life estimates are to be adopted by the Ministry of Commerce during the 1998 year. The comparative effect of adopting the new useful life estimates is likely to be as follows:
| 1998 | 1997 | |
|---|---|---|
| Depreciation rates | 35 - 70 years | 35 - 45 years |
e) Income Tax
The income tax expense charged to the statement of financial performance includes both the current year liability and the income tax effects of timing differences after allowing for non-assessable income and non-deductible expenses.
Deferred taxation is calculated using the liability method on a partial basis. Debit balances in the deferred tax account arising from net accumulated timing differences and future income tax benefits arising from income tax losses carried forward are only recognised if there is virtual certainty of realisation.
f) Inventories
Inventories are valued at the lower of cost or net realisable value including a share of fixed and variable overheads where appropriate. Cost is determined using the average cost method.
A provision for obsolescence is made for inventory which represents the average cost of all inventory items considered obsolete.
Work in progress is valued at net realisable value.
g) Contributions for subdivision/uneconomic lines
Capital contributions received from customers towards the cost of reticulating new subdivisions and constructing uneconomic lines are offset against the capital cost of the related network assets.
Next Page →
PDF embedding disabled (Crown copyright)
View this page online at:
VUW Te Waharoa —
NZ Gazette 1997, No 135
NZLII —
NZ Gazette 1997, No 135
✨ LLM interpretation of page content
🌾
CentralPower Limited Financial Statements
(continued from previous page)
🌾 Primary Industries & ResourcesElectricity, Financial Statements, Line Business, Electricity Retailing, Accounting Policies, Income Recognition, Investments, Fixed Assets, Depreciation, Income Tax, Inventories, Contributions