✨ Financial Statements Notes
7 SEPTEMBER NEW ZEALAND GAZETTE 3285
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (continued)
(a) Income Tax
The group adopts the liability method of accounting for deferred taxation.
The taxation charge against the surplus for the year is the estimated liability in respect of that surplus after allowance for all the permanent differences and timing differences not expected to reverse in the foreseeable future. This is the partial basis for the calculation of deferred taxation.
Future tax benefits attributable to tax losses or losses carried forward are recognised in the financial statements only when there is virtual certainty that the benefit of the timing differences will be realised or any losses utilised.
The taxation effect of the timing difference not recognised is disclosed in note 4.
(b) Fixed Assets
Fixed Assets Other Than Distribution Network System Assets
All fixed assets are initially recorded at cost.
Distribution Network System Assets
The Distribution Network System Assets were revalued by independent consultants, Coopers & Lybrand, to an ODV valuation of $527,406,000 as at 31 March 1997. Subsequently this valuation has been reduced by Power New Zealand Limited in respect of the years ending 31 March 1997 and 31 March 1998 for changes in asset lives as required by the second edition of the ODV handbook dated 28 May 1998.
The ODV valuation method allows for assets purchased prior to 1 April 1997 to be restated at their replacement cost less an appropriate provision for depreciation. Comparison is then made between their depreciated value and their economic value. Should this result in a lower figure then the economic value is substituted. Additions made subsequent to 1 April 1997 have been added at cost.
(c) Depreciation
Depreciation of fixed assets, other than freehold land, has been charged at rates calculated to allocate on a straight-line basis either the cost of the asset, or the valuation, less estimated residual value, over their estimated useful lives as follows:
(i) Freehold Buildings 50 – 100 years
(ii) Reticulation System 15 – 70 years
(iii) Plant, Vehicles and Equipment 3 – 10 years
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VUW Te Waharoa —
NZ Gazette 1998, No 135
NZLII —
NZ Gazette 1998, No 135
✨ LLM interpretation of page content
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Notes to Financial Statements
(continued from previous page)
💰 Finance & RevenueAccounting Policies, Deferred Taxation, Fixed Assets, Depreciation, ODV Valuation