✨ Financial Statements
15 DECEMBER 2004 NEW ZEALAND GAZETTE, No. 165 4079
The depreciation methods and depreciation rates used are as follows:
| Asset class | Depreciation method | Depreciation rates |
|---|---|---|
| Primary distribution assets | Straight line | 1.43% - 3.66% |
| Secondary distribution assets | Straight line | 1.33% - 10.31% |
| Substation assets | Straight line | 2.22% - 14.58% |
| Load control plant | Straight line | 5.00% - 36.39% |
| Streetlights | Straight line | 1.67% - 2.55% |
| Consumer connection assets | Straight line | 1.82% - 6.59% |
| Communication assets | Straight line | 1.43% - 4.00% |
| Plant and equipment | Diminishing value | 20% |
| Motor vehicles | Diminishing value | 20% |
| Computer equipment | Diminishing value | 48% |
The depreciation rates on distribution system assets in existence at the time of the previous revaluation (31 March 2001) are based on the assessed residual lives as determined in the calculation of the Optimised Depreciated Replacement Cost (ODRC).
New assets (as from 1 April 2001) were assessed based on the standard useful lives as contained in the Handbook for Optimised Deprival Valuation of System Fixed Assets of Electricity Line Businesses (4th edition) as issued by the Ministry of Economic Development and dated October 2000.
Pole structures, which have a physical life well in excess of the assessed residual life, were assessed by the company’s qualified engineers.
(c) Income tax
Income tax expense is recognised on the operating surplus before taxation, adjusted for permanent differences between taxable and accounting income.
Deferred tax is calculated using the comprehensive basis under the liability method. This involves recognising the tax effect of all timing differences between accounting and taxable income as a deferred tax asset or liability on the statement of financial position.
A deferred tax asset is recognised only where there is virtual certainty that the benefit will be utilised.
(d) Receivables
Receivables are carried at estimated net realisable value after providing for debts where collection is in doubt.
(e) Financial instruments
The company estimates that in respect of the reported financial instruments, being cash, short-term investments and debtors, fair value is equivalent to the carrying amount as stated in the statement of financial position.
Credit risk
The company places short-term investments with registered banks only. The company has a credit policy which is used to manage this exposure to credit risk. As part of this policy, limits on the amount of surplus funds placed with any one banking institution have been set and approved by the Board of Directors.
Concentrations of credit risk
The company’s customers are electricity retailers. The credit risk is not considered to be high. The company does not have any other significant concentrations of credit risk.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2004, No 165
Gazette.govt.nz —
NZ Gazette 2004, No 165
✨ LLM interpretation of page content
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Network Tasman Limited Line Business Financial Statements
(continued from previous page)
💰 Finance & Revenue1 December 2004
Depreciation Methods, Depreciation Rates, Income Tax, Receivables, Financial Instruments, Credit Risk