New Zealand Gazette – 1998 – No. 116

Page 2847

✨ Financial Statements Notes



17 AUGUST

NEW ZEALAND GAZETTE

2847

WAITOMO ENERGY SERVICES LIMITED

Line 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:

Asset Type Depreciation Rate Method
Buildings 40-100 years Straight Line
Motor Vehicles, plant & equipment 10% to 50% Diminishing Value
Network plant & equipment 20 - 50 years Straight Line

Land is not depreciated.

Infrastructural accounting has been adopted for those parts of the distribution asset that are perpetually renewed. This means:

(i) The asset is not depreciated
(ii) Asset replacements are expensed in the year of replacement, unless the replacement of any individual asset materially increases the network ODV value in which case the asset is capitalised to the extent of the increase in ODV value.
(iii) Any reductions in ODV value of the network asset due to inadequate maintenance are expensed in the year of inadequate maintenance.

Other components which are separately identifiable and have a finite life e.g. 33kV substation transformers are 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 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.



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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