✨ Financial Statements
4 DECEMBER 2006 NEW ZEALAND GAZETTE, No. 163 4733
Buildings on land not owned by the Company are recorded at cost less depreciation and are not revalued.
The farm land and buildings for the subsidiary, Metro Power Ltd, are stated at cost and not revalued.
Distribution system assets have been revalued to Depreciated Replacement Cost (DRC) as at 31 March 2004, based on a valuation conducted by PriceWaterhouseCoopers, Registered Valuers, as at 31 March 2004.
The results of the revaluation of land and buildings, and distribution system assets, are credited or debited to the appropriate revaluation reserve. Where this results in a debit balance in the asset revaluation reserve this balance is expensed in the Statement of Financial Performance.
Land and buildings, and distribution system assets, are revalued by independent registered valuers on a five-yearly basis. Valuations will be undertaken more regularly if necessary to ensure no individual item of property, plant and equipment within a class is included at a valuation that is not materially different from its fair value.
Additions between revaluations are recorded at cost.
(vi) Depreciation
Depreciation is charged on a straight line basis so as to write off the cost or valuation of the fixed assets to their estimated residual value over their expected economic lives. The estimated economic lives are as follows:-
Distribution system:
- Lines/transformers/substations 45-70 years
- Distribution switchgear 35-55 years
- Meters/communication/SCADA 5-15 years
- Buildings - structural 50 years
- electrical and mechanical 20 years
- other 10 years
- Motor vehicles 5-15 years
- Plant and equipment 3-20 years
(vii) Inventories
Inventories are stated at the lower of cost and net realisable value.
The cost of inventories is principally determined on a weighted average basis.
(viii) Accounts Receivable
Accounts Receivable are stated at estimated realisable value after providing against debts where collection is doubtful.
(ix) Work in Progress
The value of work in progress is determined using the percentage of completion method. Profits are recognised only when the outcome of the contract can be reliably estimated. Foreseeable losses on a contract are recognised in the Statement of Financial Performance immediately.
(x) Taxation
The taxation charge against the profit for the year is the estimated liability in respect of that profit after allowance for permanent differences and timing differences not expected to reverse in future periods. This is the partial basis for the calculation of deferred taxation.
The Company follows the liability method of accounting for deferred taxation.
Future taxation benefits attributable to losses carried forward, or timing differences, are recognised in the financial statements only where there is virtual certainty of realisation.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 163
Gazette.govt.nz —
NZ Gazette 2006, No 163
✨ LLM interpretation of page content
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Northpower Limited and Subsidiary Statement of Accounting Policies
(continued from previous page)
💰 Finance & Revenue31 March 2006
Financial statements, Accounting policies, Northpower Limited, Metro Power Limited, Energy Companies Act 1992, Financial Reporting Act 1993