✨ Financial Accounting Policies
31 AUGUST NEW ZEALAND GAZETTE 3139
e) Depreciation
Depreciation is provided on a straight line basis on all tangible fixed assets other than freehold land, at rates calculated to allocate the assets’ cost or valuation less estimated residual value, over their estimated useful lives.
Major depreciation periods are:
- Buildings - 50 years
- Computer Equipment - 3 to 5 years
- Distribution System - 33 to 35 years
- Motor Vehicles - 7 to 10 years
- Plant and Equipment - 10 years
h) Taxation
The income tax expense charged to the statement of financial performance includes both the current year’s provision and the income tax effects of timing differences calculated using the liability method.
Tax effect accounting is applied on a comprehensive basis to all timing differences. A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation.
i) Employee Entitlements
These have been valued as the actual liabilities of SCANPOWER as at 31 March 1998. This includes the estimated liability for annual leave and long service leave as a result of services rendered by employees up to balance date.
j) Leases
SCANPOWER leases a truck for its lines maintenance work. Under the terms of the lease, all the risks and benefits of ownership effectively remain with the lessors. Lease payments are recognised as an expense in the periods the amounts are payable and a full disclosure of future commitments is provided in note 12.
k) Financial Instruments
The company places its cash deposits with high-credit quality financial institutions.
The company does not normally require deposits from customers except where there has previously been non-payment of outstanding accounts. No other form of security or collateral is required to support financial instruments with credit risk.
SCANPOWER has entered into electricity price hedging contracts with electricity generators in order to minimise the risk of price fluctuations on the electricity spot market. Assets, liabilities, and any unrealised revenues and expenses associated with these instruments as at balance date are not recognised in the financial statements. Realised revenues and expenses are recognised in the statement of financial performance on maturity of the hedging contracts and are incorporated as part of the cost of wholesale electricity.
Full disclosure of information about electricity price hedging contracts to which SCANPOWER is a party is provided in note 15.
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VUW Te Waharoa —
NZ Gazette 1998, No 127
NZLII —
NZ Gazette 1998, No 127
✨ LLM interpretation of page content
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Certificate of Financial Statements for Scanpower Limited
(continued from previous page)
🏭 Trade, Customs & Industry14 August 1998
Financial Statements, Accounting Policies, Electricity Information Disclosure, Scanpower Limited, Regulations