✨ Financial Accounting Policies
4452
NEW ZEALAND GAZETTE, No. 154
28 NOVEMBER 2006
Vector Limited & Subsidiaries
Gas Distribution Activities
Statement of Accounting Policies (continued)
For the year ended 30 June 2006
l) Provisions
Employee entitlements
Employee entitlements to salaries and wages, annual leave, long-term leave and other benefits are recognised when they accrue to employees.
Other provisions
A provision for claims is recognised as a liability where a constructive or legal obligation exists to settle items in the foreseeable future. A provision is recognised where the likelihood of a resultant liability is considered more probable than not. Where the likelihood of a resultant liability is more than remote but insufficient to warrant a provision, such events are disclosed as contingent liabilities.
m) Financial instruments
Derivative financial instruments are used within predetermined policies and limits in order to manage the exposure to fluctuations in foreign currency exchange rates and interest rates.
Derivative financial instruments that are designated as hedges of specific items are recognised on the same basis as the underlying hedged items. The Vector group does not engage in speculative transactions or hold derivative financial instruments for trading purposes.
Fees and other costs incurred in raising debt finance not directly attributable to the acquisition of subsidiaries are capitalised and amortised over the term of the debt instrument or debt facility.
Interest income and expenses are recognised on an accrual basis. Where a debt instrument is issued at a discount or premium, the discount or premium is capitalised and amortised over the life of the instrument.
Fair value adjustments on derivative transactions acquired are capitalised to goodwill and the mark to market adjustment included in the statement of financial position. The component relating to goodwill is accounted for in accordance with the accounting policy for goodwill arising on acquisition. The mark to market adjustment is amortised to the statement of financial performance over the period of the underlying derivative.
The allocation of debt and equity items is in accordance with the principles and rules of ACAM. The debt and equity balances have been allocated based on the debt to equity ratio of the Vector group.
n) Foreign currencies
Transactions in foreign currencies are translated at the New Zealand rate of exchange ruling at the date of the transaction. At balance date foreign monetary assets and liabilities not hedged by foreign currency derivative instruments are translated at the closing rate, and exchange variations arising from these translations are included in the statements of financial performance as operating items.
Monetary assets and liabilities in foreign currencies at balance date hedged by foreign currency derivative instruments are translated at contract rates.
Changes in accounting policy
All accounting policies have been applied on a basis consistent with those applied for the year ended 30 June 2005.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 154
Gazette.govt.nz —
NZ Gazette 2006, No 154
✨ LLM interpretation of page content
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Vector Limited & Subsidiaries Gas Distribution Financial Position
(continued from previous page)
💰 Finance & RevenueFinancial Statement, Accounting Policies, Consolidation, Goodwill, Income Recognition, GST, Receivables, Inventories, Provisions, Financial Instruments, Foreign Currencies