✨ Financial Statements Notes
Notes to the financial statements (continued)
For the year ended 31 March 2002
Any surplus on revaluation is transferred directly to equity unless it offsets a previous decrease in value recognised in the statement of financial performance, in which case it is recognised in the statement of financial performance. A decrease in value is recognised in the statement of financial performance where it exceeds the surplus previously transferred to equity.
Disposal of Fixed Assets
Where a fixed asset is disposed of, the profit or loss recognised in the statement of financial performance is calculated as the difference between the sale price and the carrying value of the fixed asset.
Depreciation
Depreciation is calculated on a straight line basis to allocate the cost or revalued amount of an asset, less any residual value, over its useful life.
Major depreciation periods are:
| Buildings | 40 – 100 years |
| Distribution system | 10 – 60 years |
| Motor Vehicles | 5 – 10 years |
| Plant & Equipment | 5 – 15 years |
(B) Receivables
Receivables are stated at estimated realisable value after providing against debts where collection is doubtful.
(C) Inventories
Inventories are stated at the lower of cost or net realisable value. The estimated costs of marketing, selling and distribution are deducted in calculating net realisable value.
Cost is determined on a weighted average basis and includes expenditure incurred in acquiring the inventories and bringing them to their existing condition and location.
(D) Taxation
The income tax expense charged to the statement of financial performance includes both the current year’s provision and the income tax effect of timing differences calculated using the liability method.
Tax effect accounting is applied on a comprehensive basis to all timing differences. A debit balance in the deferred tax account arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2002, No 117
Gazette.govt.nz —
NZ Gazette 2002, No 117
✨ LLM interpretation of page content
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Notes to the financial statements for Eastland Network Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Accounting Policies, Fixed Assets, Valuation, Depreciation, Receivables, Inventories, Taxation