✨ Financial Statements Notes
NELSON ELECTRICITY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
for the year to 31 March 2006
Statement of Accounting Policies
1. Entity Statement
Nelson Electricity Limited is a public company registered under the Companies Act 1993 and a reporting entity for the purposes of the Financial Reporting Act 1993.
Nelson Electricity owns the electricity distribution network which serves the central Nelson City area. The distribution network assets were leased to Citipower Ltd between December 1991 and March 1999. As a result of restructuring required in accord with the Energy Industry Reform Act the lease was terminated on 1 April 1999 and Nelson Electricity now contracts with the electricity retailers (Trustpower, Meridian etc) who supply electricity across the Nelson network.
2. Accounting Policies
2.1 Authority
These financial statements have been prepared for the sole purpose of complying with Requirement 6 of the Electricity (Information Disclosure) Requirements 2004.
2.2 Measurement Base
The measurement base adopted is that of historic cost with the exception of certain items for which specific accounting policies are disclosed.
2.3 Depreciation
Depreciation has been provided on all major assets, excluding land, at the following rates.
| Buildings | 2% SL |
| Distribution System | 1.43% to 6.67% SL |
| Plant and Equipment | 14.4% - 60% DV |
2.4 Taxation
The income tax expense charged to the Statement of Financial Performance includes both the current year’s provision and the income tax effects of timing differences calculated using the liability method.
A debit balance in the deferred taxation account arising from timing differences or income tax losses is only recognised when there is virtual certainty of realisation.
2.5 Financial Instruments
The company is party to financial instruments as part of its every day operations. These financial instruments include cash and bank deposits, accounts receivable and payable, and loans which have been recognised in the statement of financial position.
Revenues and expenses in relation to all financial instruments are recognised in the Statement of Financial Performance.
Except for loans, which are recorded at cost and those items covered by a separate accounting policy, all financial instruments are shown at their estimated fair value.
2.6 Plant Property and Equipment
Distribution system assets were revalued as at 1 April 2004 to current depreciated replacement cost (DRC) as assessed by independent valuers PricewaterhouseCoopers and certified in their advice of 6 May 2005. Revaluation surpluses are transferred directly to the asset revaluation reserve.
Land assets are carried at current market value.
It is intended that network and land assets will be revalued every three years. Subsequent additions are recorded at cost. All other assets are recorded at cost less depreciation.
Next Page →
Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 139
Gazette.govt.nz —
NZ Gazette 2006, No 139
✨ LLM interpretation of page content
🏭
Notes to the Financial Statements for Nelson Electricity Limited
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Accounting Policies, Depreciation, Taxation, Financial Instruments, Plant Property and Equipment, Nelson Electricity Limited