✨ Natural Gas Corporation Financial Accounting Policies
4078 NEW ZEALAND GAZETTE No. 159
The revaluation increase or decrease is transferred from the revaluation reserve to retained earnings on the disposal of an asset.
Construction in progress is recorded at cost. For projects having a cost in excess of $500,000 and a construction period of not less than three months, finance costs relating to that project are capitalised. The finance costs capitalised are based on the actual cost directly attributable to the construction of the asset. Where this is not clearly identifiable, NGC’s cost of debt is used.
Assets constructed by NGC are commissioned and transferred from construction in progress to fixed assets as each facility or operating unit within a facility becomes operational and available for use.
iii) Intangible Assets
The identifiable intangible asset recognises the purchase price for the gas network acquired over and above the certified ODV valuation.
The identifiable intangible assets are amortised over the expected average remaining life of the network assets of 42 years, a straight-line basis.
iv) Current Assets
Accounts receivables are valued at their estimated realisable value.
Inventories are valued at the lower of cost and net realisable value. Cost is determined on a weighted average basis.
All other current assets are valued at their estimated realisable value.
v) 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):
Low Pressure Pipelines 25 to 65 years Motor Vehicles 5 years
Meters and Stations 20 to 50 years Plant and Equipment 5-15 years
Buildings 40-100 years Capital Spares 5-15 years
Depreciation of pipelines commences when the pipeline is physically complete and flowing gas.
vi) 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.
vii) 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.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2000, No 159
Gazette.govt.nz —
NZ Gazette 2000, No 159
✨ LLM interpretation of page content
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Natural Gas Corporation Accounting Policies
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🌾 Primary Industries & ResourcesAccounting Policies, Intangible Assets, Depreciation, Taxation, Financial Reporting