✨ Financial Statements Notes
16 SEPTEMBER NEW ZEALAND GAZETTE 3549
(d) Fixed Assets
All fixed assets are initially recorded at cost.
Freehold land and buildings were subsequently revalued on 1 April 1991 to government valuation dated October 1990.
Distribution system assets were revalued in 1997 to a carrying value which equated to 80% of Optimised Deprival Value (ODV).
Motor vehicles are valued at book values established in April 1987, plus additions at cost less depreciation.
Plant and equipment and computer equipment are valued at cost less depreciation.
(e) 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 has been 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.
(f) Receivables
Receivables are stated at their estimated realisable value. An estimate is made for doubtful debts based on a review of all outstanding amounts at year end. Bad debts are written off during the period in which they are identified.
(g) Inventories
Inventory has been stated at the lower of cost and net realisable value. Inventory has been valued on the basis of average cost during the year.
The reticulation inventory held for the purpose of supporting the existing distribution network is accounted for as a fixed asset.
(h) Financial Instruments
Pursuant to FRS 31 the company estimates that in respect of the reported financial instruments, being cash, short-term investments and debtors, fair value is equivalent to the carrying amount as stated in the Statement of Financial Position.
The company holds cash in minimal quantities and places short term investments with only registered banks and limits the amount of credit exposure to any one registered bank. Concentrations of credit risk with respect to debtors are limited due to the large number of customers included in the company’s customer base.
Tasman Energy has entered into electricity price hedges with counterparties for the period 1 April 1998 to 30 September 2002. Under these contracts Tasman Energy has purchased a financial instrument that fixes the price of electricity in different daily and seasonal time slots. On maturity electricity is purchased at the spot price prevailing at the time of consumption. The difference between the price of the hedge and the spot price is then settled between the counterparties and Tasman Energy, regardless of whether any of the electricity for which the hedge was matched was actually purchased or not. The gain or loss on these hedge transactions is not quantifiable at balance date. As at 31 March 1998 the contract value of these hedges was $39.6m.
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VUW Te Waharoa —
NZ Gazette 1998, No 147
NZLII —
NZ Gazette 1998, No 147
✨ LLM interpretation of page content
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Tasman Energy Limited Financial Statements
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🏭 Trade, Customs & Industry11 August 1998
Financial Statements, Accounting Policies, Fixed Assets, Taxation, Receivables, Inventories, Financial Instruments