✨ Financial Statements
NGC Gas Transmission Activities
Statement of Accounting Policies
For the Year Ended 30 June 2006
For the purposes of the Gas (Information Disclosure) Regulations 1997
d) General Accounting Policies
The general accounting policies as recommended by the New Zealand Institute of Chartered Accountants for the measurement and reporting of financial performance and financial position, under the historical cost method, as modified by the revaluation of certain assets, have been followed in the preparation of these financial statements.
e) Specific Accounting Policies
The following specific accounting policies, which materially affect the measurement of financial performance and financial position, have been adopted:
i) Property, Plant and Equipment
Pipelines, compressors and gate stations are recorded at the most recent valuation, adjusted by subsequent additions, disposals and depreciation. Valuations are carried out every three years and reviewed by independent experts, using the optimised deprival valuation methodology.
All property, plant and equipment other than pipelines, compressors and gate stations are disclosed at cost less accumulated depreciation.
Under the modified historical cost method, the revaluation, reflecting the difference between the net carrying value of the assets and the valuation (net of deferred tax), is recorded in the asset revaluation reserve. In arriving at the net carrying value any accumulated depreciation is written back against the asset cost.
Construction in progress is recorded at cost. For projects having a cost in excess of $500,000 and a construction period of not less than three months, finance costs relating to that project are capitalised. Finance costs capitalised are based on the actual cost directly attributable to the construction of the asset. Where this is not clearly identifiable, the weighted average cost of debt is used to apportion finance costs to the project.
Assets constructed by NGC are commissioned and transferred from construction in progress to property, plant and equipment as each facility or operating unit within a facility becomes operational and available for use.
ii) Current Assets
Inventories are valued at the lower of cost and net realisable value. Cost is determined on a weighted average cost basis. All other current assets are valued at their estimated realisable value.
iii) Depreciation
Non current assets are depreciated on a straight line basis.
The rates of depreciation vary according to the nature and economic lives of the assets and fall within the following ranges:
| Asset Type | Depreciation Period |
|---|---|
| High Pressure Pipelines | 65 years |
| Compressors and Gate Stations | 35 - 45 years |
| Plant, Equipment and Motor Vehicles | 5 - 20 years |
| Buildings | 40 - 100 years |
| Capital Spares | 5 - 20 years |
Depreciation of pipelines commences when the pipeline is physically complete and is being used to transport gas.
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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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Certification of NGC Gas Transmission Financial Statements
(continued from previous page)
💰 Finance & Revenue28 November 2006
Financial Statements, Gas Transmission, Certification, Gas (Information Disclosure) Regulations 1997