✨ Financial Accounting Policies
30 SEPTEMBER 2005 NEW ZEALAND GAZETTE, No. 167 4205
The taxation charge against the surplus of the period is the estimated liability in respect of that surplus after allowance for all permanent differences and timing differences not expected to crystallise in the foreseeable future. This is the partial basis for the calculation of deferred taxation.
Future taxation benefits attributable to timing differences or losses carried forward are recognised in the financial statements only where there is virtual certainty that the benefit of the timing differences will be realised or any losses utilised.
The taxation charge against the surplus of the period is the estimated liability in respect of that surplus using a proforma income tax rate of 33%.
i) Inventory
Inventory is valued at the lower of historical cost and net realisable value. The weighted average method has been used to determine historical cost.
j) Investments
Investments are valued at the lower of cost and net realisable value.
k) Impairment
Assets are assessed for impairment at each reporting date. If the estimated recoverable amount of an asset is less than its carrying amount, the asset is written down to its estimated recoverable amount and an impairment loss is recognised in the statement of financial performance.
l) Leases
Operating lease payments, where the lessors effectively retain substantially all the risks and benefits of ownership of the leased items, are included in the determination of operating surplus before taxation in equal instalments over the lease term.
m) Finance Leases
Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases and are capitalised. The finance charge is allocated to periods during the lease term so as to allocate a constant rate of return.
n) Financial Instruments
The company has various financial instruments with off-balance sheet risk for the primary purpose of reducing its exposure to fluctuations in interest rates. While these financial instruments are subject to risk that market rates may change subsequent to acquisition, such changes would generally be offset by opposite effects on the items being hedged.
For interest rate swap agreements entered into in connection with the management of interest rate exposure, the differential to be paid or received is accrued as interest rates change and is recognised as a component of interest income/expense over the life of the agreement.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2005, No 167
Gazette.govt.nz —
NZ Gazette 2005, No 167
✨ LLM interpretation of page content
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Powerco Limited Gas Information Disclosure
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🏭 Trade, Customs & Industry21 September 2005
Gas, Information Disclosure, Powerco Limited, Regulations, Statutory Declaration, Accounting Policies, Taxation, Inventory, Investments, Impairment, Leases, Finance Leases, Financial Instruments