✨ Financial Accounting Policies
22 AUGUST 2005 NEW ZEALAND GAZETTE, No. 134 3267
Any revaluation increment or decrement is recognised in the statement of movements in equity. If the revaluation results in a revaluation deficit, the revaluation deficit is recognised in the statement of financial performance. To the extent that a revaluation reverses a previous revaluation deficit that was recognised in the statement of financial performance, such revaluation increment is recognised in the statement of financial performance.
Land and buildings other than those included in distribution assets, are stated at market valuation. (refer note 9).
All other property, plant and equipment is recorded at cost less accumulated depreciation.
Where the estimated recoverable amount of an asset is less than the carrying amount, the asset is written down. The impairment loss is recognised in the statement of financial performance.
b) Depreciation
Depreciation is provided on either a diminishing value (DV), or straight line (SL) basis on all property, plant and equipment, at rates calculated to allocate the assets’ cost or valuation less estimated residual value, over their estimated useful lives.
Main depreciation rates are:
- Substation assets 2.2 – 2.5% straight line
- Other Distribution assets 1.4 – 6.7% straight line
- Buildings 1% – 2.5% straight line and 4% diminishing value
- Leasehold Improvements 11%–31% diminishing value
- Plant and equipment 10% – 50% diminishing value
- Computer equipment 20% – 50% straight line
- Motor vehicles 20% – 25% diminishing value and 20% straight line
c) Receivables
Receivables are stated at their estimated realisable value.
d) Income tax
The tax expense against the surplus for the year is the estimated liability in respect of that surplus after allowance for permanent differences plus any adjustments arising from prior years.
Electra Limited follows the liability method of accounting for deferred tax, applied on a partial basis.
The partial basis considers the cumulative income tax effect of all timing differences. The income tax effect of timing differences is only recognised as deferred tax for those timing differences that can be expected to reverse in the foreseeable future.
Future tax benefits attributable to losses carried forward are recognised in the financial statements only where there is virtual certainty that the benefit of the losses will be utilised.
e) Leases
Operating lease payments, where the lessors retain substantially all the risks and benefits of ownership of the leased items, are included in the determination of the operating profit in equal instalments over the lease term.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2005, No 134
Gazette.govt.nz —
NZ Gazette 2005, No 134
✨ LLM interpretation of page content
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Property, plant and equipment accounting policies
(continued from previous page)
💰 Finance & RevenueProperty Plant and Equipment, Depreciation, Receivables, Income Tax, Leases