✨ Financial Statements
26 NOVEMBER NEW ZEALAND GAZETTE 3901
TRANSPOWER NEW ZEALAND LIMITED GROUP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 1997
Capital Work in Progress
Capital work in progress is recorded at cost. Cost is determined by including all costs directly associated with bringing the fixed assets to their location and condition. Finance costs incurred during the period of time that is required to complete and prepare the fixed asset for its intended use are capitalised for all projects having a cost in excess of $1 million dollars as part of the total cost for capital work in progress.
The finance costs capitalised are based on the actual costs directly attributable to the construction of the asset. Where this is not clearly identifiable, Transpower’s weighted average cost of capital is used.
Assets are transferred from capital work in progress to fixed assets as they become operational and available for use.
(g) Infrastructure Asset
The infrastructure accounting methodology is applied to the infrastructure asset. The infrastructure asset consists of the individual asset components that form the network of transmission lines comprising the National Grid. These individual components are regarded together as a single asset. All other assets are classified as non infrastructure assets.
It is the Group’s intention to maintain the operating capability of the transmission line network into the foreseeable future.
Operating capability refers to the output of service of the infrastructure asset at a point in time and is determined by reference to attributes such as physical output capacity, associated operating costs and quality of output.
The Group’s asset management practices result in the infrastructure asset having an extremely long life with minimal decline in book value. Having regard to the life and residual value of the infrastructure asset the Directors consider that the depreciation of the asset is immaterial. Accordingly, no depreciation is charged on the infrastructure asset. Expenditure incurred to maintain the operating capability of the infrastructure asset is treated as an expense in the Statements of Financial Performance. This treatment differs from standard accounting for fixed assets which allocates the cost of the asset over its estimated economic life and capitalises any expenditure that extends the asset’s life.
Expenditure on the infrastructure asset that enhances or develops the operating capability of the asset is capitalised.
Next Page →
PDF embedding disabled (Crown copyright)
View this page online at:
VUW Te Waharoa —
NZ Gazette 1997, No 165
NZLII —
NZ Gazette 1997, No 165
✨ LLM interpretation of page content
🏭
TRANSPower New Zealand Limited Information Disclosure
(continued from previous page)
🏭 Trade, Customs & IndustryElectricity, Financial Statements, Accounting Policies, Reporting Entity, Measurement Base, Capital Work in Progress, Infrastructure Asset