New Zealand Gazette – 1998 – No. 115

Page 2823

✨ Financial Accounting Policies



17 AUGUST NEW ZEALAND GAZETTE 2823

WEL ENERGY GROUP LIMITED

Land and buildings are revalued by independent valuers every three years on the basis of open market value for existing use.

Cost for internally constructed assets comprise direct labour, materials, freight, and a proportion of production overheads based on a normal level of activity. All other fixed assets are recorded at cost less accumulated depreciation.

(h) Depreciation of Fixed Assets

Depreciation of the distribution system and buildings is provided for on a straight line basis over their estimated useful lives as follows:

  • Buildings 3%
  • Distribution system 4.5%

Depreciation of other fixed assets is provided for on a diminishing value basis as follows:

  • Furniture 20 - 25%
  • Plant and Equipment 20 - 30%
  • Vehicles 25%

(i) Principles of Line and Energy Business Split

The line and energy businesses form segments of the operations of the Group. The allocation of costs, revenue, assets and liabilities were carried out on a basis which reflects the items attributable to each segment of the Group.

Where possible, financial statement items were allocated directly to the line or energy business. In those instances where direct allocation was not possible, the following allocation methodologies were employed.

Corporate Overheads

Corporate overhead costs were allocated as follows:

Personnel and payroll costs based on staff numbers; accounting costs based on complexity (primarily the number of transactions generated); Directors fees and consultancy based on an estimate of time spent on each segment. All other overheads were allocated in proportion to the allocation of other previously allocated overheads.

Property Costs

Allocated using market based rentals.

Expenditure

Where a segment of the Group performs line or energy business activities in addition to other functions each item of expenditure incurred by that segment has been allocated to the line or energy business in proportion to the total level of line or energy business activity undertaken by the segment.

Bank Balances

All monies are managed centrally with each segment maintaining a current account with Corporate. Allocating bank balances directly has resulted in no bank balances being shown within the line or energy businesses.



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✨ LLM interpretation of page content

🏭 Statement of Financial Performance and Financial Position by WEL Energy Group Limited (continued from previous page)

🏭 Trade, Customs & Industry
9 July 1998
Electricity, Financial Performance, Financial Position, Revenue, Expenses, Profit, Assets, Liabilities, WEL Energy Group