✨ Financial Accounting Policies
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NEW ZEALAND GAZETTE, No. 169
12 DECEMBER 2006
intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
f) Financial assets
Financial assets are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, are initially measured at fair value, net of transaction costs.
Subsequent to initial recognition, investments in subsidiaries are measured at cost in accordance with NZ IAS-27. Other financial assets are classified into one of four categories; financial assets at fair value through the profit or loss, held to maturity investments, available for sale financial assets or loan and receivables. At balance date the Company had the following classes of financial assets:
Loans and receivables
Trade receivables and other receivables are recorded at amortised cost less impairment.
g) Financial liabilities
Financial liabilities are recognised when the entity became party to the contractual provisions of the instrument.
h) Term Debt
All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. Subsequent to initial recognition, loans and borrowings are carried at amortised cost. Borrowing costs are recognised as an expense when incurred, except to the extent that they are capitalised in accordance with e) above.
All interest bearing loans and borrowings are measured at amortised cost using the effective interest rate method which allocates the cost through the expected life of the borrowing. Amortised cost is calculated taking account of issue costs, and any discounts or premiums on draw down.
After initial recognition for those interest-bearing loans and borrowings where fair value hedge accounting is applied, the loan balance is adjusted for the change in the hedge risk only. The Company policy is to hedge the interest/foreign currency risk associated with term debt with financial instruments on matched terms.
Borrowings are classified as current liabilities (either advances and deposits or current portion of term debt) unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
i) Trade and other payables
Trade payables and other accounts payable are recognised when the consolidated entity becomes obliged to make future payments resulting from the purchase of goods and services. Subsequent to initial recognition, trade payables and other accounts payable are recorded at amortised cost. Given the nature of these liabilities amortised cost equals their notional principal.
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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
✨ LLM interpretation of page content
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Audit Report for Powerco Limited – Electricity Division
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🏭 Trade, Customs & Industry6 December 2006
Audit, Financial Statements, Commerce Commission, Powerco Limited, Electricity, Disclosure Requirements, NZ IFRS, GAAP