✨ Financial Statements and Accounting Policies
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 the energy business alone interfaces with electricity and gas 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.
l) Comparative Figures
As this is the first disclosure of financial statements required by the Gas (Information Disclosure) Regulations 1997 comparative figures have not been provided for the preceding year. Where a breakdown of a note has not been required for reporting purposes, 1996 comparative figures have been supplied in line with the Company’s annual financial report.
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VUW Te Waharoa —
NZ Gazette 1997, No 180
NZLII —
NZ Gazette 1997, No 180
✨ LLM interpretation of page content
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Statement of Accounting Policies for Powerco Limited
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🏭 Trade, Customs & IndustryAccounting Policies, Financial Statements, Powerco Limited, Gas Information Disclosure Regulations