New Zealand Gazette – 2006 – No. 157

Page 4587

✨ Financial Statements



UNISON NETWORKS - LINES BUSINESS

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS
For the year ended 31 March 2006

17 EMPLOYEE ENTITLEMENTS

Employee entitlements expected to be taken within the 12 months following balance date are recorded as current liabilities. All other employee entitlements are recorded as term liabilities.

18 GOODWILL ARISING FROM ACQUISITION

2006 $'000 2005 $'000
Goodwill at cost 89,888 89,888
Restatement of goodwill (60,559) -
Accumulated amortisation (15,329) (10,834)
Balance at year end 14,000 79,054

Goodwill arising on acquisition was not established by a valuation but represents the difference between the purchase price paid for the Rotorua and Taupo electrical distribution networks in November 2002 and the subsequent Depreciated Replacement Cost values assigned to tangible assets for financial reporting purposes as at 31 March 2003.

Unison's Policy is to amortise goodwill over a twenty year useful life as well as assess the goodwill balance for any impairment. Any impairment is determined by comparing the economic value of the Taupo and Rotorua networks against its component values, being the tangible value of its assets and the intangible value reflected through goodwill. Any resulting impairment is deducted from the goodwill component.

The impairment test has been assessed assuming future cash inflows and outflows relating to the Taupo and Rotorua assets in existence at 31 March 2006. Cash inflows are based on line charge revenues calculated using the Commerce Commission's "Building Blocks" methodology and regional allocations in line with Unison's proposed new administrative segmentation offer, which has yet to be agreed with the Commission. Cash outflows relate to operating and capital expenditure allocations using current best estimates and reflect expenditure essential to maintaining the assets at their current service capability. Note that any changes to these assumptions can have a material impact on the remaining goodwill balance and therefore the assessed goodwill adjustment.

The remaining unamortised goodwill balance after the impairment test is assessed to be $14 million. However, the revaluation of the electrical distribution network assets as at 31 March 2006 results in a significant uplift in tangible asset values. In essence some of the Taupo and Rotorua Networks value previously reflected in Goodwill has been replaced by the uplift in the tangible value of the electrical distribution network.

19 CAPITAL WORK IN PROGRESS

2006 $'000 2005 $'000
Electrical distribution network 4,798 9,805
Other 406 -
5,204 9,805

20 ACCOUNTS PAYABLE AND ACCRUALS

2006 $'000 2005 $'000
Trade creditors 8,363 6,863
Final dividend payable 4,500 -
Interest payable 1,239 1,201
14,102 8,064

21 EVENTS SUBSEQUENT TO BALANCE DATE

There have been no significant reporting events subsequent to balance date.



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2006, No 157


Gazette.govt.nz — PDF NZ Gazette 2006, No 157




✨ LLM interpretation of page content

🏭 Notes to Financial Statements for Unison Networks Limited (continued from previous page)

🏭 Trade, Customs & Industry
Financial statements, Employee entitlements, Goodwill, Capital work in progress, Accounts payable, Events subsequent to balance date