✨ Financial Statements Notes
11 SEPTEMBER NEW ZEALAND GAZETTE 3447
Wairarapa Electricity Limited and Subsidiary Companies
Notes to the Financial Statements
(iv) Fixed Assets continued
The distribution system has been valued at the 30 November 1997 Optimised Deprival Valuation (O.D.V). This valuation has been made in accordance with the Electricity (Information Disclosure) Regulations 1994 pursuant to Section 170 of the Electricity Act 1992 and was undertaken by Catheral Taylor Associates - Consultant Engineers.
The carrying value of the distribution system is the 30 November 1997 O.D.V together with additions at cost since that date.
(v) Distribution System Maintenance
A maintenance programme sufficient to maintain the distribution system indefinitely is undertaken on a continuous basis. All maintenance expenditure is charged to the Consolidated Statement of Financial Performance as incurred in accordance with the maintenance programme. Maintenance expenditure includes all expenditure items which restore the distribution system to its original condition without enhancing the system's operational capacity. Provision is made for deferred maintenance where applicable.
(vi) Electricity Sales
All amounts actually billed to customers during the year are included as electricity sales. Provision is made and included in electricity sales for the estimated value of electricity used but not billed at year end.
(vii) Income Tax
The income tax expense charged to the Consolidated Statement of Financial Performance includes both current and deferred tax and is calculated after allowing for non - assessable income and non - deductible costs.
Deferred taxation, calculated using the comprehensive basis under the liability method, is accounted for in respect of those timing differences expected to reverse in the foreseeable future. A future tax benefit is recognised only if there is virtual certainty of realisation.
(viii) Financial Instruments
Revenue and expenses from financial instruments are recognised using accrual accounting.
(ix) Construction Contracts
Construction contracts are stated at cost plus attributable profit to date less progress billings. Cost includes all costs directly related to specific contracts and an allocation of general overhead expenses incurred by the group's contract operations. Profit is based on percentage of completion of each contract and is not recognised unless the outcome of the contract can be reliably estimated. Losses are taken to the Consolidated Statement of Financial Performance in the period in which they are identified.
(x) Allocations to Business Units
Costs, revenues, assets and liabilities relating to the provision of contracting services to external parties have been allocated to Energy and Other Business.
Transmission charges have been incorporated as a cost to the lines business.
Meter reading and associated costs have been split 50% to Line Business and 50% to Energy and Other Business.
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VUW Te Waharoa —
NZ Gazette 1998, No 142
NZLII —
NZ Gazette 1998, No 142
✨ LLM interpretation of page content
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Wairarapa Electricity Limited Financial Statements
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