✨ Financial Statements Accounting Policies
Distribution system:
- Lines/transformers substations 45-70 years
- Communication/SCADA 15 years
- Distribution switchgear 35-55 years
- Buildings 50 years
- Motor vehicles 5-10 years
- Plant and equipment 3-20 years
(v) Inventories
Stocks and work-in-progress are stated at the lower of cost and net realisable value.
The cost of stocks is principally determined on a weighted average basis.
The cost of work-in-progress includes materials, and a portion of direct labour and production overhead appropriate to the stage of completion attained.
(vii) Debtors
Debtors are stated at estimated realisable value after providing against debts where collection is doubtful.
(viii) Taxation
The taxation charge against the profit for the year is the estimated liability in respect of that profit after allowance for permanent differences and timing differences not expected to reverse in future periods. This is the partial basis for the calculation of deferred taxation.
The Company follows the liability method of accounting for deferred taxation.
Future taxation benefits attributable to losses carried forward, or timing differences, are recognised in the financial statements only where there is virtual certainty of realisation.
(ix) Research and Development Costs
Research and development costs are normally expensed in the period incurred except that development costs are deferred where future benefits are expected to exceed these costs. Deferred development costs are amortised over future periods on a basis related to expected future revenue.
(x) Financial Instruments
Northpower is party to financial instrument arrangements as part of everyday operations. These instruments include bank accounts, accounts receivable, creditors, and short term deposits. Revenues and expenses in relation to all financial instruments are recognised in the Statement of Financial Performance. All financial instruments are recognised in the Statement of Financial Position.
Northpower has limited its exposure to credit risk in respect of its investments by only investing in institutions with a high credit rating, and limiting the amount that can be invested in any one institution. Northpower believes this policy reduces the risk of any loss which could arise from its investing activities.
(xi) GST
These Financial Statements are prepared on a GST exclusive basis, with the exception of accounts receivable and accounts payable, which are GST inclusive.
(xii) Employee Entitlements
Provision is made in respect of the group’s liability for annual leave, long service leave and retirement gratuities. Annual leave has been calculated on an actual entitlement basis at current rates of pay, while the other provisions have been calculated on an actuarial basis at current rates of pay.
Changes in Accounting Policies:
There have been no changes in accounting policies. The policies have been applied on a basis consistent with previous years.
Next Page →
Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2001, No 113
Gazette.govt.nz —
NZ Gazette 2001, No 113
✨ LLM interpretation of page content
🏭
Accounting Policies for Northpower Limited
(continued from previous page)
🏭 Trade, Customs & Industry17 August 2001
Accounting Policies, Financial Statements, Depreciation, Inventories, Debtors, Taxation, Research and Development, Financial Instruments, GST, Employee Entitlements