✨ Financial Statements Continuation
2 OCTOBER NEW ZEALAND GAZETTE 3959
TRANSALTA NEW ZEALAND LIMITED
Notes to and forming part of the Financial Statements (Continued)
For the Year Ended 31 March 1998
j) Energy Contracts
Amounts received upon assuming electricity hedge contracts from other parties are amortised over the term of the contracts.
k) Financial Instruments
The Company has entered into various financial instruments with off-balance sheet risk for the primary purpose of managing its exposure to fluctuations in interest rates and foreign currency exchange rates. While these financial instruments are subject to risk that market rates may change subsequent to acquisition, such changes would generally be offset by opposite effects on the items being hedged. These instruments are designated as, and are considered effective as, hedges. Any realised gains and losses on interest rate hedges are recognised as a component of interest expense in the statement of financial performance over the life of the hedge. Gains and losses on foreign exchange contracts are recognised as a component of the related transaction in the period the transaction is completed.
The Company has entered into electricity price hedging contracts 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 purchase cost of electricity. Arbitrage gains and losses on specific, identifiable back to back contracts are recognised in the statement of financial performance when the contracts are executed.
l) Changes in Accounting Policies
The basis of valuing the electricity network distribution assets has been changed from cost to current value effective 1 April 1997. This change has resulted in an increase in the carrying value of network distribution assets and a corresponding increase in the asset revaluation reserve of $23,983,000. Due to increased asset lives, there is no material impact on the depreciation charge.
There have been no other changes in accounting policies during the period.
The information disclosed in the 1998 Information Disclosure package issued by TransAlta New Zealand Limited has been prepared solely for the purposes of the Electricity (Information Disclosure) Regulations 1994.
The information should not be used for any other purpose than that intended under the regulations.
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VUW Te Waharoa —
NZ Gazette 1998, No 165
NZLII —
NZ Gazette 1998, No 165
✨ LLM interpretation of page content
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Financial Statements of TransAlta New Zealand Limited
(continued from previous page)
🏭 Trade, Customs & Industry28 August 1998
Financial Statements, Accounting Policies, Electricity, Information Disclosure