✨ Accounting Policies
5 SEPTEMBER NEW ZEALAND GAZETTE
SPECIFIC ACCOUNTING POLICIES (continued)
(g) Distinction Between Capital and Revenue Expenditure
Capital expenditure is defined as all expenditure on the creation of a new asset, and any expenditure which results in a significant improvement to the original function of an existing asset.
Revenue expenditure is defined as expenditure which maintains an asset in working condition and expenditure incurred in maintaining and operating the Company.
(h) Depreciation
Fixed assets are depreciated on the basis of valuation or cost price less estimated residual value on a straight line basis over their estimated useful life.
Rates used are:
| Asset Type | Depreciation Rate |
|---|---|
| Buildings | 1 - 2.5% |
| Plant and equipment | 2.5 - 15% |
| Network assets | 1 - 5% |
| Furniture and fittings | 10% |
| Computer equipment | 20% |
(i) Taxation
Income tax expense is charged in the statement of financial performance in respect of current year’s earnings after allowing for permanent differences. Deferred taxation is determined on a comprehensive basis using the liability method. Deferred tax assets attributable to timing differences or income tax losses are only recognised where there is virtual certainty of realisation.
(j) Goods and Services Tax
These accounts are prepared exclusive of GST except for accounts receivable and accounts payable which are GST inclusive.
(k) Financial Instruments
The Lines Business is party to financial instruments as part of its normal operations. These financial instruments include bank accounts, short-term deposits, debtors, creditors and loans. All financial instruments are recognised in the Statement of Financial Position. All revenues and expenses in relation to financial instruments are recognised in the Statement of Financial Performance.
(l) Comparative Figures
Comparative figures for the 1999 and previous years are in respect of the Dunedin network only.
Figures for the 2000 financial year are in respect of the combined Dunedin and Central networks.
(m) Changes in Accounting Policies
There has been a change in accounting policy to reflect that these financial statements recognise on a comprehensive basis all deferred tax timing differences using the liability method when previously recognised on a partial basis. The change has been made to better reflect the deferred tax liability.
An adjustment of $8.60 million has been made to the Revaluation Reserve to recognise the deferred taxation liability arising from previous years timing differences. The current year’s tax expense recognises all timing differences relating to 1999/2000, amounting to $3.71 million.
With this exception all other policies have been applied on a basis consistent with that used in previous years.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2000, No 122
Gazette.govt.nz —
NZ Gazette 2000, No 122
✨ LLM interpretation of page content
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Disclosure of Information Relating to Transactions Between Persons in a Prescribed Business Relationship and Related Parties
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💰 Finance & RevenueAccounting Policies, Capital Expenditure, Revenue Expenditure, Depreciation, Taxation, GST, Financial Instruments, Comparative Figures, Changes in Accounting Policies