✨ Financial Statements Notes
25 AUGUST NEW ZEALAND GAZETTE 2723
HAWKE’S BAY NETWORK LIMITED – LINES BUSINESS
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2000
i. Capitalisation
Capital expenditure is defined as all expenditure incurred in the creation of a new asset, replacement of an asset that has reached the end of its economic life, or increased service potential of an existing asset. Constructed assets are included in fixed assets as each becomes operational and available for use.
j. Cash Flows
For the purpose of the Statement of Cash Flows, cash includes cash on hand, deposits held at call with banks, and investments in money market instruments.
k. Employee Entitlements
A liability for annual leave, long service leave and retirement gratuities is accrued and recognised in the Statement of Financial Position. Liabilities for annual and long service leave are calculated on an entitlement basis at current rates. Retirement gratuity liability is calculated using current rates for all qualifying staff aged 60 years or over.
Changes in Accounting Policies
Network Assets and Buildings were revalued for accounting purposes on 31 March 1999. As a result, depreciation for this year has been calculated on these revaluations rather than on cost, as in the past. The effect of this change has been to increase depreciation for the year by approximately $1,400,000.
With the revaluation of network assets as at 31 March 1999, accounting for deferred tax on the comprehensive basis involved recognition of the liability for deferred tax arising from the revaluation. A review of the continued application of this policy has led to a change to the partial basis for the calculation of deferred tax, given that the comprehensive basis requires the accumulation of a significant liability that is not expected to crystallise. The effect on these Financial Statements has been to reverse last year’s adjustment arising from the revaluation of the network assets, by increasing Asset Revaluation Reserve and decreasing Deferred Taxation Liabilities by $8,383,000.
The remaining opening balance of the Deferred Tax Liability of $2,094,000 (reflecting cumulative timing differences from previous years not expected to reverse and thus crystallise in the foreseeable future) has been written back to Taxation Expense (Benefit) in the Statement of Financial Performance. The tax effect on timing differences arising during the year of $184,000 has also been treated in this way, rather than been recognised and added to the Deferred Tax Liability as required by the comprehensive basis.
All other policies have been applied on bases consistent with those used in previous years.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2000, No 109
Gazette.govt.nz —
NZ Gazette 2000, No 109
✨ LLM interpretation of page content
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Notes to and forming part of the financial statements for Hawke’s Bay Network Limited
(continued from previous page)
💰 Finance & RevenueFinancial statements, Accounting policies, Capitalisation, Cash flows, Employee entitlements, Depreciation, Deferred tax, Asset revaluation, Hawke’s Bay Network Limited