✨ Financial Statements Notes
Notes to the financial statements
Statement of accounting policies
Reporting entity
Orion New Zealand Limited ("the company") is a company registered under the Companies Act 1993. The company is a reporting entity for the purposes of the Financial Reporting Act 1993.
Special purpose financial statements
These financial statements have been prepared for the purpose of complying with the requirements of the Electricity Information Disclosure Requirements 2004 ("the Requirements"), and should be read in conjunction with the audited financial statements for the year ending 31 March 2004.
Allocations of the costs, revenues, assets and liabilities of the company have been made in accordance with the mandatory avoidable cost allocation methodology as required by the Requirements.
This approach defines the line business as the company’s core business, and makes an assessment of the costs, revenues, assets and liabilities that would be avoided by the line business if all non-core businesses were to cease operation. The costs, revenues, assets and liabilities that would be avoided are allocated to those non-core businesses. Costs, revenues, assets and liabilities that would not be avoided are allocated to the line business.
Measurement base
The accounting principles recognised as appropriate for the measurement and reporting of financial performance, cash flows and financial position on an historical cost basis are followed by the company, with the exception that certain property, plant and equipment have been revalued.
Specific accounting policies
The following specific accounting policies that materially affect the measurement of financial performance, cash flows and financial position are applied:
(a) Capital contributions
Capital contributions that are refundable to customers are treated as current liabilities until refunded. Non-refundable contributions are credited to income when received.
(b) Distinction between capital and revenue expenditure
Capital expenditure is defined as all expenditure incurred in the creation of a new asset and any expenditure that results in a significant restoration or increased service potential for existing assets. Constructed assets are included in property, plant and equipment as each becomes operational and available for use. Revenue expenditure is defined as expenditure that is incurred in the maintenance and operation of the property, plant and equipment of the company.
(c) Accounts receivable
Accounts receivable are valued at their expected realisable value. All known bad debts are written off during the financial year.
(d) Inventories
Stocks and inventories are valued at the lower of cost (FIFO or weighted average) and net realisable value, with additional allowances for obsolescence where necessary. Chargeable work in progress includes direct materials and labour and an allocation of overheads that directly relate to the contract.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2004, No 168
Gazette.govt.nz —
NZ Gazette 2004, No 168
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Notes to the financial statements for Orion New Zealand Limited
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🏭 Trade, Customs & IndustryAccounting policies, Financial statements, Reporting entity, Special purpose financial statements, Orion New Zealand Limited