✨ Financial Statements Continuation
4362
NEW ZEALAND GAZETTE
No. 173
TRANSPower NEW ZEALAND LIMITED LINES BUSINESS
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2002
(l) Financial Instruments
Derivative financial instruments including foreign exchange contracts, forward rate
agreements, foreign exchange options, cross currency interest rate swaps, interest rate
swaps and interest rate options which are entered into for the purpose of reducing exposure
to fluctuations in interest rates and foreign exchange rates. While these financial
instruments are subject to the risk that market rates will change subsequent to acquisition,
such changes would generally be offset by an opposite effect on the items being hedged.
For interest rate swaps, the differential to be paid or received is accrued as interest
rates change and is recognised as a component of interest and expensed over the life
of the swap. Premiums paid on interest rate options are amortised over the period
to maturity. The settlement cash flows on the maturity of forward rate agreements
are amortised over the period of the underlying asset or liability that the financial
instrument is hedging.
Foreign exchange contracts and cross currency interest rate swaps entered into as
hedges of foreign currency assets and liabilities are valued at exchange rates
prevailing at balance date. Any unrealised gains and losses are offset against foreign
currency gains or losses on the related asset or liability.
Additional information about financial instruments to which the Transpower
Lines Business is a party is provided in Note 20.
(m) Reclassifications
Certain reclassifications of prior year balances have been made to conform with current year
classifications.
Changes in Accounting Policies
There have been no changes in accounting policies and all policies have been applied on a
basis consistent with those used in previous periods with the following exception:
Transpower has adopted the requirements of the recently introduced Financial Reporting
Standard No. 3 Accounting for Property, Plant and Equipment except for the requirements
in respect to Infrastructure Accounting.
Financial Reporting Standard No. 3 Property, Plant and Equipment permits continuance
of the Infrastructure Accounting methodology until financial periods ending on or after 31
March 2004.
The principal change is that assets must now be valued at their highest and best use, whereas
previously these assets were valued based on existing use.
There has been no significant effect on the amounts recognised in these financial statements
from adopting this standard.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2002, No 173
Gazette.govt.nz —
NZ Gazette 2002, No 173
✨ LLM interpretation of page content
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Transpower New Zealand Limited Notes to Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Instruments, Derivatives, Hedging, Accounting Policies, Reclassifications