New Zealand Gazette – 1998 – No. 194

Page 4575

✨ Financial Performance Statement of Natural Gas Corporation



NEW ZEALAND GAZETTE

30 NOVEMBER

4575

iv) Depreciation
The rates of depreciation vary according to the nature and economic lives of the assets and fall within the following ranges (on a straight line basis):

Asset Type Depreciation Range
Low Pressure Pipelines 25 to 50 Years
Meters, Compressors & DRS 20 to 50 Years
Buildings 40-100 years
Plant and Equipment 5-15 years
Capital Spares 5-15 years

Depreciation of pipelines commences when the pipeline is physically complete and flowing gas.

v) Deferred Income
Contributions received from gas utilities and other parties towards the capital expenditure on pipelines are accounted for initially in a deferred income account. Amortisation to income of the deferred income account takes place only after the obligations in connection with the contributions are performed. The deferred income account is amortised to the statement of financial performance over the life of the pipelines to which they relate or over the life of the gas supply contract whichever is the shorter.

vi) Taxation
NGC recognises deferred taxation using the liability method and on a comprehensive basis. Income tax expense is recognised on the surplus before taxation. It is then adjusted for permanent differences between taxable and accounting income. The tax effect of all timing differences, which arise from items being brought to account in different periods for income tax and accounting purposes, is recognised in the statement of financial position as a future tax benefit or as deferred tax. The future tax benefit or deferred tax is stated at the income tax rates prevailing at balance date. Future tax benefits are not recognised unless realisation of the asset is virtually certain. Future tax benefits and deferred tax is offset.

vii) Deferred Expenditure
Deferred expenditure is expenditure which provides benefits beyond the current accounting period and is written off over periods up to ten years. These expenditures relate to the connection of new customers to the gas system and the conversion of existing customers' appliances to the use of natural gas.

e) Changes in Accounting Policy and Comparatives
There have been no changes in accounting policies. The presentation of certain comparatives has been restated to ensure consistency with current year disclosures.

  1. Surplus before Taxation
$ Thousands
1998
Surplus before Taxation is stated after charging:
Audit fees and expenses 32
Fees for other services paid to the Auditors 3
Depreciation 4,730
Leasing Costs 454
  1. Income Tax
$ Thousands
1998
The Income Tax Expense has been calculated as follows:
Surplus before Taxation 10,654
Income Tax at 33% 3,516
Adjustments to taxation for:
Non-deductible expenditure (21)
Taxation charge in Statement of Financial Performance 3,495


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🏭 Financial Performance Statement of Natural Gas Corporation (continued from previous page)

🏭 Trade, Customs & Industry
Financial Performance, Revenue, Surplus, Taxation, Natural Gas, Accounting Policies