✨ Financial Statements
VECTOR LIMITED & SUBSIDIARIES
GAS DISTRIBUTION ACTIVITIES
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2007
Leasehold improvements
The cost of improvements to leasehold property are capitalised and depreciated over the unexpired period of the lease or the estimated useful life of the improvements, whichever is the shorter.
J) PROVISIONS
Employee entitlements
Employee entitlements to salaries and wages, annual leave, long-service leave and other benefits are recognised when they accrue to employees.
Other provisions
A provision is recognised as a liability where a constructive or legal obligation exists to settle items in the foreseeable future. A provision is recognised where the likelihood of a resultant liability is considered more probable than not. Where the likelihood of a resultant liability is more than remote but insufficient to warrant a provision, such events are disclosed as contingent liabilities.
K) FINANCIAL INSTRUMENTS
Derivative financial instruments are used within predetermined policies and limits in order to manage its exposure to fluctuations in foreign currency exchange rates and interest rates.
Derivative financial instruments that are designated as hedges of specific items are recognised on the same basis as the underlying hedged items.
No speculative transactions are conducted nor are any derivative financial instruments held for trading purposes.
Fees and other costs incurred in raising debt finance not directly attributable to the acquisition of subsidiaries are capitalised and amortised over the term of the debt instrument or debt facility.
Interest income and expenses are recognised on an accrual basis. Where a debt instrument is issued at a discount or premium, the discount or premium is capitalised and amortised over the life of the instrument.
Fair value adjustments on derivative instruments acquired are initially recognised in the statement of financial position as a mark to market adjustment. Subsequent to initial recognition, the mark to market adjustment is amortised to the statement of financial performance over the period of the underlying derivative.
L) FOREIGN CURRENCIES
Transactions in foreign currencies are translated at the New Zealand rate of exchange ruling at the date of the transaction. At balance date foreign monetary assets and liabilities not hedged by foreign currency derivative instruments are translated at the closing rate, and exchange variations arising from these translations are included in the statement of financial performance.
Monetary assets and liabilities in foreign currencies at balance date hedged by foreign currency derivative instruments are translated at contract rates.
CHANGES IN ACCOUNTING POLICY
All accounting policies have been applied on a basis consistent with those applied for the year ended 30 June 2006.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2007, No 132
Gazette.govt.nz —
NZ Gazette 2007, No 132
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