✨ Financial Accounting Policies
13 AUGUST NEW ZEALAND GAZETTE 2615
(c) Dividends
Dividends have been calculated in accordance with the Company’s dividend policy.
(d) Allocation of Assets and Liabilities
Assets and liabilities are those which are directly related to the Lines Business.
(e) Current Assets
Accounts receivable are those directly related to the Lines Business and are valued at expected realisable value less provision for doubtful debts.
(f) Fixed Assets
On 1 July 2001, Dunedin Electricity revalued its electricity distribution network assets to the fair market value determined by the chartered accounting firm of KPMG. In the opinion of the Directors and their professional advisors, this best represents the fair value of those assets.
The increment in value resulting from this is credited to the revaluation reserves of the Company after adjusting for depreciation previously claimed.
Network additions since 1 July 2001 are carried at their cost less depreciation.
(g) Distinction Between Capital and Revenue Expenditure
Capital expenditure is defined as all expenditure on the creation of a new asset, and any expenditure which results in a significant improvement to the original function of an existing asset. Revenue expenditure is defined as expenditure which maintains an asset in working condition and expenditure incurred operating the Company.
(h) Depreciation
Fixed assets are depreciated on the basis of valuation or cost price less estimated residual value on a straight line basis over their estimated useful life. Rates used are:
Buildings 1 - 2.5%
Plant and equipment 2.5 - 15%
Network assets 1 - 15%
Furniture and fittings 10%
Computer equipment 20%(i) Taxation
Income tax expense is charged in the statement of financial performance in respect of current year’s earnings after allowing for permanent differences. Deferred taxation is determined on a comprehensive basis using the liability method. Deferred tax assets attributable to timing differences or income tax losses are only recognised where there is virtual certainty of realisation.
(j) Goods and Services Tax
These accounts are prepared exclusive of GST except for accounts receivable and accounts payable which are GST inclusive.
(k) Financial Instruments
The Lines Business is party to financial instruments as part of its normal operations. These financial instruments include bank accounts, short-term deposits, debtors, creditors and loans. All financial instruments are recognised in the Statement of Financial Position. All revenues and expenses in relation to financial instruments are recognised in the Statement of Financial Performance.
(l) Changes in Accounting Policies
There have been no changes in accounting policies. All policies have been applied on bases consistent with those used in previous years.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2003, No 99
Gazette.govt.nz —
NZ Gazette 2003, No 99
✨ LLM interpretation of page content
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Disclosure of Information Required in Financial Statements
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🏭 Trade, Customs & Industry16 July 2003
Financial Statements, Disclosure, Regulations, Dunedin Electricity Limited