✨ Financial Accounting Policies
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs are assigned to inventories on hand at balance date using weighted average cost.
Investments
Investments are stated at cost price or net realisable value.
Property Plant and Equipment
The distribution network is valued at the most recent optimised deprival value, adjusted by additions (at cost), disposals and depreciation. Revaluations are carried out every three years and reviewed by independent experts. All other fixed assets are recorded at cost.
Depreciation
Depreciation is provided on a straight line basis on all tangible fixed assets, at rates calculated to allocate the asset's cost or optimised deprival value, less estimated residual life, over their estimated useful lives.
Major depreciation rates are:
- Mains & Services 1-10% S.L
- Condition Renewals 2% S.L
- Meters & Customer Station Rebuilds 1-10% S.L
- Vehicles, Plant, Office Equipment & Furniture and Fittings 20% S.L
- Computer Hardware & Software 33% S.L
- Leasehold Improvements 10-15% S.L
Financial Instruments
The Company 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 and all revenues and expenses in relation to financial instruments are recognised in the Statement of Financial Performance.
Employee Entitlements
Provision is made in respect of the Company's liability for annual leave and long service leave. Annual leave and long service leave have been calculated on an accrual entitlement basis, at current rates of pay.
Income Tax
The taxation charge against the profit for the period is the estimated liability in respect of that profit after allowance for permanent differences and timing differences not expected to reverse in the foreseeable future. This is the partial basis for the calculation of deferred taxation.
The Company follows the liability method of accounting for deferred taxation.
Future tax benefits attributable to tax losses or timing differences are only recognised when there is virtual certainty of realisation.
Operating Leases
Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased items are classified as operating leases. Operating lease expenses are recognised on a systematic basis over the period of the lease.
Finance Leases
Leases which effectively transfer to the lessee substantially all the risks and benefits incident to the ownership of the leased item are classified as finance leases. These are capitalised at the lower of the fair value of the asset or the present value of the minimum lease payments. The leased assets and corresponding lease liabilities are recognised in the statement of financial position. The leased assets are depreciated over the period the company is expected to benefit from their use.
Changes In Accounting Policies
There have been no changes in accounting policy. All policies have been applied on bases consistent with those used in the previous period.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2004, No 154
Gazette.govt.nz —
NZ Gazette 2004, No 154
✨ LLM interpretation of page content
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Notes to the Financial Statements
(continued from previous page)
💰 Finance & RevenueAccounting Policies, Financial Statements, Inventories, Investments, Depreciation, Financial Instruments, Employee Entitlements, Income Tax, Operating Leases, Finance Leases