✨ Financial Statements
4508
NEW ZEALAND GAZETTE
No. 162
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2003
(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
Spares are now included as fixed assets and depreciated. Previously spares were accounted for as stocks of materials. This change of accounting policy has resulted in an increase in fixed assets and a reduction in stocks of materials of $17,464,000 (2002: $16,472,000). Depreciation expense in 2003 has increased by an immaterial amount.
There have been no other changes in accounting policies.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2003, No 162
Gazette.govt.nz —
NZ Gazette 2003, No 162
✨ LLM interpretation of page content
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Transpower New Zealand Limited Lines Business Notes to the Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial statements, Financial instruments, Reclassifications, Accounting policies, Spares, Fixed assets, Depreciation