New Zealand Gazette – 1998 – No. 116

Page 2841

✨ Financial Statements Notes



17 AUGUST

NEW ZEALAND GAZETTE

WAITOMO ENERGY SERVICES LIMITED

Electricity and Other Business Activity

Notes to the Financial Statements
For the Year Ended 31st March 1998

(d) Depreciation

Depreciation is provided on either a straight line or a diminishing value basis on all fixed assets other than freehold land and perpetually renewable distribution assets, at rates calculated to allocate the assets’ cost or valuation less estimated residual value, over their estimated useful life.

Major depreciation rates and methods:

  • Buildings and generation headworks 40-100 years Straight Line
  • Generation Plant 10% Diminishing Value
  • Motor Vehicles, plant & equipment 10% to 50% Diminishing Value
  • Land is not depreciated.

(e) Inventory

Stocks are stated at the lower of cost, determined on an average cost basis, or net realisable value.

(f) Investments

Short term deposits and shares are stated at the lower of cost or estimated realisable value.

(g) Taxation

Income tax expense is recognised on the operating surplus before taxation adjusted for permanent differences between taxable and accounting income. The tax effect of all timing differences, expected to reverse in the foreseeable future, which arise from items being brought to account in different periods for income tax and accounting purposes, is recognised in the Statement of Financial Position as a future tax benefit or a provision for deferred tax. The future tax benefit or provision for deferred tax is stated at the income tax rate prevailing at balance date.

Future tax benefits are not recognised unless realisation of the asset is virtually certain.

The Company uses the liability method of accounting for deferred taxation at the income tax rate prevailing at balance date and applies this on a partial basis.

(h) Changes in Accounting Policies

There have been no changes in accounting policies during the year.

(i) Basis of Allocations to Business Units

In general the Ministry of Commerce guidelines for allocation of income and expenditure have been applied. Deviations from the guidelines have been used where assumptions made in the guidelines have not held true for Waitomo Energy Services Limited. These are as follows:

The assumption that energy alone interfaces with consumers does not hold true for the company. Meter reading and various other customer related expenses are allocated across each business unit.

Various overhead costs that are an integral part of operating each business and have been allocated according to relative fixed assets involved in each business.

Interest costs allocated to the Lines Business reflects those costs associated with the Subordinated Debt. These loans were set up to ensure the fair cost allocation of low density customers.

The Customer Discount provided to be returned to customers has been allocated on a cash flow basis relative to each business segment.



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✨ LLM interpretation of page content

🏭 Waitomo Energy Services Limited Financial Performance Statement (continued from previous page)

🏭 Trade, Customs & Industry
Electricity, Financial Statements, Notes, Accounting Policies, Depreciation, Inventory, Investments, Taxation, Allocations, Business Units