✨ Accounting Policies
12 DECEMBER 2006 NEW ZEALAND GAZETTE, No. 170 4923
At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.
n) Share Capital
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
o) Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the group’s financial statements in the period in which the dividends are declared.
p) Leases
Operating lease payments, where the lessors effectively retain substantially all the risks and rewards of ownership of the leased items, are included in the determination of profit before taxation in equal instalments over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
q) Revenue Recognition
Revenue is recognised at the fair value of sales of goods and services, net of GST, rebates, discounts and capital contributions.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2006, No 170
Gazette.govt.nz —
NZ Gazette 2006, No 170
✨ LLM interpretation of page content
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Statement of Accounting Policies for Powerco Limited
(continued from previous page)
🏭 Trade, Customs & IndustryAccounting Policies, Financial Statements, Impairment Loss, Share Capital, Dividend Distribution, Leases, Revenue Recognition