✨ Financial Accounting Policies
3320
NEW ZEALAND GAZETTE
No. 124
VECTOR Limited
Electricity Lines Business
Statement Of Accounting Policies - continued
For the year ended 31 March 2002
i) Foreign currencies
Transactions denominated in a foreign currency are converted to New Zealand dollars at the exchange rates in effect at the date of the transaction, except when forward currency contracts have been taken out to cover short-term forward currency commitments.
Short-term transactions covered by forward exchange contracts are measured and reported at the forward rates specified in those contracts.
At balance date foreign currency monetary assets and liabilities are translated to New Zealand dollars at the balance date exchange rate and exchange variations arising from these translations are included in the statement of financial performance.
The exchange differences on hedging transactions undertaken to establish the price of particular sales or purchases, together with any costs associated with the hedge transactions, are deferred and included in the measurement of the purchase or sale transaction.
j) Financial instruments
The VECTOR group, of which the line business is the predominant activity, is party to financial instruments with off-balance sheet risk to meet financing needs and to reduce exposure to fluctuations in foreign currency exchange rates. These financial instruments include foreign exchange forward contracts, forward rate agreements and swaps.
The VECTOR group, of which the line business is the predominant activity, enters into foreign currency forward exchange contracts to hedge foreign currency transactions. A loss or gain on the item being hedged generally offsets any exposure to gains or losses on these forward contracts. Gains and losses on contracts which hedge specific short-term foreign currency denominated commitments are recognised as a component of the related transaction in the period in which the transaction is completed. The VECTOR group, of which the line business is the predominant activity, is not involved in foreign exchange speculation.
The net differential paid or received on interest swaps is recognised as a component of the interest expense over the period of the agreement.
k) Employee entitlements
Employee entitlements to salaries and wages, annual leave, long-term leave and other benefits are recognised when they accrue to employees.
The liability for employee entitlements is carried at the present value of the estimated future cash outflows.
Next Page →
Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2002, No 124
Gazette.govt.nz —
NZ Gazette 2002, No 124
✨ LLM interpretation of page content
🏭
Vector Limited Statement of Accounting Policies
(continued from previous page)
🏭 Trade, Customs & IndustryElectricity, Accounting Policies, Financial Statements, Vector Limited