✨ Financial Statements Accounting Policies
3374 NEW ZEALAND GAZETTE No. 139
(vi) Inventories
Stocks and work-in-progress are stated at the lower of cost and net realisable value.
The cost of stocks is principally determined on a weighted average basis.
The cost of work-in-progress includes materials, and a portion of direct labour and production overhead appropriate to the stage of completion attained.
(vii) Debtors
Debtors are stated at estimated realisable value after providing against debts where collection is doubtful.
(viii) Taxation
The taxation charge against the profit for the year is the estimated liability in respect of that profit after allowance for permanent differences. This is the comprehensive basis for the calculation of deferred taxation.
The Company follows the liability method of accounting for deferred taxation.
Future taxation benefits attributable to losses carried forward, or timing differences, are recognised in the financial statements only where there is virtual certainty of realisation.
(ix) Research and Development Costs
Research and development costs are normally expensed in the period incurred except that development costs are deferred where future benefits are expected to exceed these costs. Deferred development costs are amortised over future periods on a basis related to expected future revenue.
(x) Financial Instruments – Credit Risk
Northpower has a potential concentration of credit risk in relation to the small number of customers who represent a significant portion of trading activity.
Northpower has limited its exposure to credit risk in respect of its investments by only investing in institutions with a high credit rating, and limiting the amount that can be invested in any one institution. Northpower believes this policy reduces the risk of any loss which could arise from its investing activities.
Northpower 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.
(xi) GST
These Financial Statements are prepared on a GST exclusive basis.
Changes in Accounting Policies:
There have been no changes in accounting policies.
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VUW Te Waharoa —
NZ Gazette 1998, No 139
NZLII —
NZ Gazette 1998, No 139
✨ LLM interpretation of page content
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Certification of Financial Statements for Northpower Ltd
(continued from previous page)
🏭 Trade, Customs & Industry20 August 1998
Electricity, Information Disclosure, Financial Statements, Northpower Ltd, Accounting Policies, Inventories, Debtors, Taxation, Research and Development, Credit Risk, GST