✨ Financial Statements Notes
NEW ZEALAND GAZETTE
No. 5
TRANSALTA NEW ZEALAND LIMITED
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (continued)
FOR THE TWELVE MONTHS ENDED 31 MARCH 1997
STATEMENT OF ACCOUNTING POLICIES (continued)
Specific Accounting Policies
(a) Valuation of Assets at 1 October 1996
The assets of the Company on amalgamation of the predecessor companies EnergyDirect Corporation Limited and Capital Power Limited at 1 October 1996 were recorded at cost. The basis used to arrive at cost for the gas network distribution asset was at an amount that approximated Optimised Deprival Value (ODV). For all other assets and liabilities, cost was based on net current value.
(b) Basis of Consolidation
The Financial Statements include those of the Company and its subsidiaries which are consolidated using the purchase method. The results of any subsidiaries acquired or disposed of during the year are consolidated from the effective date of acquisition and up to the effective dates of disposal. All inter-entity transactions, profits and balances are eliminated on consolidation.
(c) Income Recognition
Gas sales represent customer usage during the financial period. Allowance is made in the sales of gas for unbilled sales being unread meters and unbilled distribution charges as at balance date.
(d) Valuation of Fixed and Long Term Assets
Assets are stated at cost.
Fixed and Long Term Assets are depreciated on a straight line basis. Depreciation is provided on all fixed assets at rates calculated to allocate the cost of acquisition, less estimated residual value, over their estimated useful lives.
Fixed and Long Term assets comprise:
| Depreciation Period | |
|---|---|
| Gas Distribution Equipment | 40 years |
| Motor Vehicles, Plant, Tools and Equipment | 5 years |
(e) Accounts Receivable
Accounts receivable are stated at their estimated net realisable value.
(f) Inventories
Inventories are valued at the lower of cost (determined on a weighted average basis) and net realisable value. Allowance is made for damaged and obsolete inventory.
(g) Other Investments
Marketable securities and investments held for resale are stated at market value. Other investments are stated at cost with due allowance being made for any permanent diminution in value.
(h) Taxation
Income tax expense is calculated using the liability method. Deferred tax is accounted for on a partial basis. Deferred tax assets are recognised only to the extent that there is virtual certainty of recovery.
(i) Operating Lease Payments
Operating lease payments are expensed in the period in which they are incurred.
(j) Deferred Costs
Deferred costs are amortised over future periods on a basis related to expected future revenue. Unamortised costs are reviewed at each balance date to determine the amount (if any) that is no longer recoverable and any amount so identified is written off.
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VUW Te Waharoa —
NZ Gazette 1998, No 5
NZLII —
NZ Gazette 1998, No 5
✨ LLM interpretation of page content
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Notes to Financial Statements for TransAlta New Zealand Limited
(continued from previous page)
🏭 Trade, Customs & Industry19 December 1997
Financial Statements, Accounting Policies, Amalgamation, Reporting Entity, Measurement Base, Gas Regulations