✨ Financial Accounting Policies
12 DECEMBER 2006 NEW ZEALAND GAZETTE, No. 169 4881
Significant accounting policies
The financial statements have been prepared on the historical cost basis, except for certain borrowings and financial instruments. Financial derivatives are carried at fair value and borrowings which have effective fair value hedges are carried at amortised cost adjusted for the fair value of interest rate risk covered by the effective hedge. The principal accounting policies adopted are set out below.
a) Critical accounting estimates and judgements
In the process of applying the groups accounting policies management have made no judgements that have had a significant effect on the amounts recognised in the financial statements.
The key assumptions concerning the future and other key sources of estimation uncertainty at 30 June 2006, that have had a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are discussed below.
b) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash in banks and investments in money market instruments, net of outstanding bank overdrafts. Bank overdrafts are shown within borrowings in the balance sheet.
c) Property, Plant and Equipment
All items of property, plant and equipment are initially recognised at cost in the statement of financial position. Cost includes the value of consideration exchanged, or fair value in the case of donated or subsidised assets, and those costs directly attributable to bringing the item to working condition for its intended use.
Land and buildings are revalued from time to time for insurance purposes only. Optimised Deprival Value (ODV) is obtained from an independent registered valuer. Any impairment is recognised for accounting purposes and recognised in the Statement of Financial Performance.
d) Depreciation of Property, Plant and Equipment
Depreciation is calculated on a straight-line basis for Network Systems and on diminishing value for all other assets, to write off the cost of the assets (other than land) over the life of the assets.
Depreciation rates based on remaining useful life, for major classes of asset are:
| Land | Not Depreciated |
| Buildings | 50 years |
| Plant and Equipment| 5 to 10 years |
| Network Systems | 10 to 65 years |
e) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 169
Gazette.govt.nz —
NZ Gazette 2006, No 169
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