✨ Vector Limited Accounting Policies
28 AUGUST NEW ZEALAND GAZETTE 3319
VECTOR Limited
Electricity Lines Business
Statement Of Accounting Policies - continued
For the year ended 31 March 2002
d) Depreciation
Depreciation is calculated so as to expense the cost of the assets, or the revalued amounts, to their residual values over their useful lives as follows:
Buildings 50 years
Distribution systems 15 - 100 years
Motor vehicles 20% - 33% per annum diminishing value
Consumer billing and information systems 3 - 40 years
Office equipment 3 - 40 years
Other fixed assets 4% - 60% per annum diminishing value
e) Accounts receivable
Accounts receivable are carried at estimated realisable value after providing against debts where collection is doubtful.
f) Income tax
The income tax expense recognised for the year is based on the accounting surplus, adjusted for permanent differences between accounting and tax rules.
The impact of all timing differences between accounting and taxable income is recognised as a deferred tax liability or asset. During the year the VECTOR group, of which the line business is the predominant activity, changed their accounting policy for income tax in relation to the recognition of timing differences to include timing differences arising as a result of the revaluation of property, plant and equipment. This is the comprehensive basis for the calculation of deferred tax under the liability method.
Previously the timing differences arising from the revaluation of distribution systems and buildings that were not expected to crystallise in the foreseeable future were not recognised.
A deferred tax asset, or the effect of losses carried forward that exceed the deferred tax liability, is recognised in the financial statements only where there is the virtual certainty that the benefit of the timing differences, or losses, will be utilised.
The deferred tax arising from timing differences resulting from revaluation of property, plant and equipment is recognised directly against the asset revaluation reserve.
g) Goods and services tax (GST)
The statement of financial performance and statement of cash flows have been prepared so that all components are stated exclusive of GST. All items in the statement of financial position are stated exclusive of GST, with the exception of the receivables and payables, which include GST invoiced.
h) Leased property, plant and equipment
Operating leases
Operating lease payments, where the lessors effectively retain substantially all the risks and benefits of ownership of the leased assets, are included in the determination of the surplus or deficit in equal instalments over the lease term.
The cost of improvements to leasehold property is capitalised and amortised over the unexpired period of the lease or the estimated useful life of the improvements, which ever is the shorter.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2002, No 124
Gazette.govt.nz —
NZ Gazette 2002, No 124
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Vector Limited Statement of Accounting Policies
(continued from previous page)
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