New Zealand Gazette – 2005 – No. 200

Page 5061

✨ Financial Statements Notes



30 NOVEMBER 2005

NEW ZEALAND GAZETTE, No. 200

5061

TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS

NOTES TO THE FINANCIAL STATEMENTS continued

FOR THE YEAR ENDED 30 JUNE 2005

(f) Fixed Assets

Historical Cost Measurement

Fixed assets are recorded at cost less accumulated depreciation. In respect of assets acquired prior to 1 July 2003, cost represents the valuation of those assets at 30 June 2003. In respect of assets acquired after 1 July 2003 cost is determined by including all costs directly associated with bringing the fixed assets to their location and condition.

When the carrying amount of an asset is greater that its estimated recoverable amount, it is written down to its recoverable value.

Capital Work in Progress

Capital work in progress is recorded at cost. Cost is determined by including all costs directly associated with bringing the fixed assets to their location and condition. Finance costs incurred during the period of time that is required to complete and prepare the fixed asset for its intended use are capitalised as part of the total cost for capital work in progress.

The finance costs capitalised are based on the actual costs directly attributable to the construction of the asset. Where this is not clearly identifiable, Transpower’s weighted average cost of capital is used.

Assets are transferred from capital work in progress to fixed assets as they become operational and available for use.

(g) Depreciation

Depreciation of fixed assets is calculated using the straight line method to allocate the cost or valuation of the fixed assets over their expected useful lives, after due allowance for their expected residual value. The estimated economic lives are as follows:

  • Transmission lines 35-70 years
  • Freshold buildings 20-25 years
  • Substations 25-55 years
  • HVDC 30 years
  • Communications 10-25 years
  • Administration assets 3-10 years

(h) Leased Assets

The Transpower Lines Business leases certain plant, equipment, land and buildings.

Finance leases effectively transfer substantially all of the risks and benefits incidental to the ownership of the leased item to the entity. Assets acquired by means of a finance lease are capitalised at the lower of the fair value of the asset and the present value of the minimum lease payments. Leased assets are depreciated over their economic lives. A corresponding liability is also established at the inception of each lease and each lease payment is allocated between the liability and finance costs.

Under operating leases all the risks and benefits of ownership are effectively retained by the lessor. Operating lease payments are representative of the pattern of benefits derived from the leased assets and are accordingly recognised in the Statement of Financial Performance as expenses, in the period in which they are incurred.



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2005, No 200


Gazette.govt.nz — PDF NZ Gazette 2005, No 200




✨ LLM interpretation of page content

🏭 Notes to the Financial Statements for Transpower New Zealand Limited Lines Business (continued from previous page)

🏭 Trade, Customs & Industry
30 June 2005
Accounting Policies, Financial Statements, Transpower, Lines Business, Fixed Assets, Depreciation, Leased Assets