✨ Financial Statements Notes
NEW ZEALAND GAZETTE
16 SEPTEMBER
3523
(h) Income Tax
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 has been applied on a comprehensive basis to all timing differences.
(i) Receivables
Receivables are stated at their estimated realisable value after adequate provision for doubtful debts. Bad debts are written off in the year in which they are identified.
(j) Inventories and Work in Progress
Inventories are valued at the lower of weighted average cost or net realisable value.
Work in progress is valued at cost comprising direct labour, materials and a proportion of production overheads based on a normal level of activity.
(k) Foreign Currencies
There were no material foreign currency transactions during the period or outstanding foreign currency balances at balance date.
(l) Financial Instruments
Interest Rate Risk
The company has various financial instruments to reduce exposure to fluctuations in interest rates. Any resulting differential to be paid or received is accrued as interest rates change and is recognised as a component of operating revenue or expense.
Electricity Price Risk
TrustPower in common with other electricity companies has entered into a number of electricity hedge contracts to reduce the risk from price fluctuations on the electricity spot market. These hedge contracts establish the price at which future specified quantities of electricity are purchased.
Any resulting differential to be paid or received is recognised as a component of operating expenses upon maturity of the contract.
Credit Risk
The company minimises its credit risk by limiting transactions to counterparties with high credit ratings and limiting the amount of funds placed with any parties at one time.
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VUW Te Waharoa —
NZ Gazette 1998, No 146
NZLII —
NZ Gazette 1998, No 146
✨ LLM interpretation of page content
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Notes to the Financial Statements for TrustPower Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Accounting Policies, Income Tax, Receivables, Inventories, Foreign Currencies, Financial Instruments, Interest Rate Risk, Electricity Price Risk, Credit Risk