✨ Financial Statements Notes
(b) Capital contributions
Capital contributions which are refundable to customers are treated as current liabilities until refunded. Non-refundable contributions are credited to income when received.
(c) Research and development costs
Research and development costs are expensed in the period incurred. Development costs are deferred where future benefits are expected to exceed those costs, otherwise such costs are expensed in the period incurred. Deferred development costs are amortised over future periods in relation 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 amounts, so identified, are expensed.
(d) Distinction between capital and revenue expenditure
Capital expenditure is defined as all expenditure incurred in the creation of a new asset and any expenditure which results in a significant restoration or increased service potential for existing assets. Constructed assets are included in fixed assets as each becomes operational and available for use. Revenue expenditure is defined as expenditure which is incurred in the maintenance and operation of the fixed assets of the group.
(e) Accounts receivable
Accounts receivable are valued at their expected realisable value. All known bad debts are written off during the financial year.
(f) Inventories
Stocks and inventories are valued at the lower of cost (FIFO or weighted average) and net realisable value, with additional allowances for obsolescence where necessary. Chargeable work in progress includes direct materials and labour and an allocation of overheads that directly relate to the contract.
(g) Investments
Investments are shown at cost. In the parent company financial statements, investments in subsidiaries are stated at cost plus share of post acquisition increases/(decreases) in net assets less goodwill write-offs.
(h) Depreciation
Depreciation has been provided on fixed assets using the straight line method at rates which amortise the cost or valuation less estimated residual value over their economic lives.
The main bases are periods not exceeding:
Electricity distribution system 70 years
Buildings 50 years
Cars and vans 5 years
Trucks 7 years
Plant and equipment 10 years
Computer equipment and software 3 years
The electricity distribution system economic lives have been set consistent with the Ministry of Commerce's revised ODV Handbook. The economic lives range from 15 - 70 years for the different components of the distribution system.
(i) Fixed assets
The group's fixed assets are revalued on a cyclic basis at least once every three years by independent valuers to net current value. Any subsequent fixed asset additions are initially recorded at cost until the next revaluation.
Next Page →
PDF embedding disabled (Crown copyright)
View this page online at:
VUW Te Waharoa —
NZ Gazette 1999, No 121
NZLII —
NZ Gazette 1999, No 121
✨ LLM interpretation of page content
🏭
Notes to the Financial Statements of Orion New Zealand Limited
(continued from previous page)
🏭 Trade, Customs & IndustryAccounting Policies, Capital Contributions, Research and Development Costs, Capital and Revenue Expenditure, Accounts Receivable, Inventories, Investments, Depreciation, Fixed Assets