✨ Financial Reporting Policies
27 NOVEMBER 2006
NEW ZEALAND GAZETTE, No. 150
4343
Depreciation
Fixed assets have been depreciated, so as to write off cost less estimated residual value over their estimated useful lives, on the following basis:
Electricity Distribution System
1.4% to 2.2% (45 to 70 years) straight line (SL) for lines, cables & zone substations
2.2% to 2.9% (35 to 45 years) SL for switchgear, distribution transformers, distribution substations, service connection equipment other than voltage regulators (which are depreciated at 1.8%, 55 years SL)
Buildings
1% to 4% SL for the majority of buildings
Plant & Equipment
40% diminishing value (DV) for computer hardware and software
20% and 25% DV for other items
Motor Vehicles
20% and 25% DV for majority of vehicles
Estimated useful lives of Distribution System fixed assets were reviewed in conjunction with their revaluation to Depreciated Replacement Cost on 31 March 2004.
Intangible Assets - Research and Development
All research costs are recognised as an expense when incurred.
When a project reaches the stage where it is reasonably certain that further expenditure can be recovered through the processes or products produced, development expenditure is recognised as a development asset. The asset is amortised from the commencement of commercial production of the product or service to which it relates over the period of the expected benefit, which generally ranges from 5 to 10 years.
Taxation
The tax expense recognised for the year is based on the accounting surplus, adjusted for permanent differences between accounting and tax rules, and timing differences between accounting and tax rules that are not expected to crystallise in future periods. This is the partial basis for the calculation of deferred tax under the liability method.
A deferred tax asset, or the effect of losses carried forward that exceed the deferred tax liability, is recognised in the financial statements only where there is virtual certainty that the benefit of the timing differences, or losses, will be utilised.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 150
Gazette.govt.nz —
NZ Gazette 2006, No 150
✨ LLM interpretation of page content
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Counties Power Limited – Financial Reporting Policies
(continued from previous page)
🏭 Trade, Customs & Industry16 November 2006
Financial Statements, Depreciation, Intangible Assets, Research and Development, Taxation, Fixed Assets, Estimated Useful Lives, Accounting Surplus