New Zealand Gazette – 2005 – No. 15

Page 338

✨ Financial Statements



338 NEW ZEALAND GAZETTE, No. 15 18 JANUARY 2005

Twelve Months
Ended
31 March 2004
$000 Nine Months
Ended
31 March 2003
$000

  1. PROPERTY, PLANT AND EQUIPMENT

Land (At Valuation) 87 87
Buildings (At Valuation and Cost)
Accumulated Depreciation (23) (10)
789 802

Plant and Equipment (At Valuation and Cost) 188 188
Accumulated Depreciation (28) (12)
160 176

Network Assets (At Valuation and Cost) 96,661 93,407
Accumulated Depreciation (5,821) (2,465)
90,840 90,942

Total Property, Plant and Equipment 91,876 92,007

Property, plant and equipment is recorded at fair value at the date of acquisition. Subsequent additions are recorded at cost.

  1. INTANGIBLES

Opening Goodwill Arising on Acquisition 14,572 15,140
Amortised During the Period (756) (568)

Total Intangibles 13,816 14,572

Goodwill has been amortised over 20 years as prescribed by FRS36 Accounting for Acquisitions Resulting in Combinations of Entities.

It is the view of the Management Committee that amortisation of goodwill as prescribed by FRS36 is inappropriate. The assets purchased have an average life of 53 years and were valued and purchased on the basis that they would continue in perpetuity.

The Management Committee believe that amortisation of goodwill over a 20 year period results in the understatement of the operating surplus in these accounts by an amount of $756,000 (2003: $568,000).

There is considerable industry concern that the acquisition of monopoly assets is not appropriately treated under FRS36, particularly in relation to the establishment of goodwill and the minimum amortisation requirements for goodwill. The adoption of international accounting standards (optional from 2005) will require amortisation on the basis of an annual impairment test. The Management Committee will consider adopting the international standard at the first opportunity.



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2005, No 15


Gazette.govt.nz — PDF NZ Gazette 2005, No 15




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