New Zealand Gazette – 2006 – No. 161

Page 4690

✨ Financial Statements



4690 NEW ZEALAND GAZETTE, No. 161 1 DECEMBER 2006

31 March 2006
$000

31 March 2005
$000

  1. PROPERTY, PLANT AND EQUIPMENT

Land (At Cost)

87

87

Buildings (At Cost)
1,034
1,027
Accumulated Depreciation
(77)
(45)

957
982

Plant and Equipment (At Cost)
197
190
Accumulated Depreciation
(61)
(44)

136
146

Office Equipment and EDP Equipment (At Cost)
118
118
Accumulated Depreciation
(24)
(8)

94
110

Network Assets (At Cost)
102,535
98,412
Accumulated Depreciation
(12,643)
(9,231)

89,892
89,181

Total Property, Plant and Equipment
91,166
90,506

  1. INTANGIBLES

Opening Goodwill Arising on Acquisition
15,140
15,140
Accumulated Amortisation
(2,838)
(2,081)

Total Intangibles
12,302
13,059

Goodwill has been amortised over 20 years as prescribed by FRS36 Accounting for Acquisitions Resulting in Combinations of Entities.

It is the view of the Management Committee that amortisation of goodwill as prescribed by FRS36 is inappropriate. The assets purchased have an average life of 53 years and were valued and purchased on the basis that they would continue in perpetuity.

The Management Committee believe that amortisation of goodwill over a 20 year period results in the understatement of the operating surplus in these accounts by an amount of $757,000 (2005: $757,000).

There is considerable industry concern that the acquisition of infrastructure assets is not appropriately treated under FRS36, particularly in relation to the establishment of goodwill and the minimum amortisation requirements for goodwill.

Under the New Zealand equivalents of International Financial Reporting Standards (NZ IFRS) goodwill is not amortised. It is instead subject to an annual impairment test. OtagoNet is likely to adopt NZ IFRS for the year ended 31 March 2008.



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Online Sources for this page:

VUW Te Waharoa — PDF NZ Gazette 2006, No 161


Gazette.govt.nz — PDF NZ Gazette 2006, No 161




✨ LLM interpretation of page content

🏭 OtagoNet Joint Venture Lines Business Financial Statements for the Year Ended 31 March 2006 (continued from previous page)

🏭 Trade, Customs & Industry
Financial Statements, Electricity, Information Disclosure, OtagoNet Joint Venture, Property, Plant and Equipment, Intangibles, Goodwill, Amortisation, FRS36, NZ IFRS