✨ Financial Accounting Policies
VECTOR LIMITED
ELECTRICITY LINES BUSINESS
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2007
B) ACQUISITIONS AND DISPOSALS OF AN ENTITY OR BUSINESS
Acquisition or disposal during the year
Where an entity becomes or ceases to be a part of the group during the period, the results of the entity are included in the results from the date that control or significant influence commenced or until the date that control or significant influence ceased. When an entity is acquired all identifiable assets and liabilities are recognised at their fair value at acquisition date. The fair value does not take into consideration any future intentions by the group. Where an entity that is part of the group is disposed of, the gain or loss recognised in the statement of financial performance is calculated as the difference between the sale price and the carrying amount of the identifiable assets and liabilities and related goodwill of that entity.
Goodwill arising on acquisition
Goodwill arising on acquisition of a subsidiary or associate represents the excess of the purchase consideration over the fair value of the identifiable net assets acquired. Goodwill is amortised to the statement of financial performance on a straight line basis over the period during which benefits are expected to be derived up to a maximum of 20 years.
Fees and other costs incurred in raising debt or equity finance directly attributable to the acquisition are recognised as part of the cost of acquisition within goodwill and amortised on a straight line basis over a period of up to 20 years.
C) INCOME RECOGNITION
Income from the provision of goods and services is recognised as goods and services are delivered. Interest and rental income is accounted for as earned. Income from customer contributions is recognised on a percentage of completion basis.
D) GOODS AND SERVICES TAX (GST)
The statement of financial performance and statement of cash flows have been prepared so that all components are stated exclusive of GST. All items in the statement of financial position are stated net of GST, with the exception of receivables and payables, which include GST invoiced.
E) ACCOUNTS RECEIVABLE
Accounts receivable are carried at estimated realisable value after providing against debts where collection is doubtful.
F) INCOME TAX
The income tax expense recognised for the year is based on the operating surplus before taxation, adjusted for permanent differences between accounting and tax rules.
The impact of all timing differences between accounting and taxable income is recognised as a deferred tax liability or asset. This is the comprehensive basis for the calculation of deferred tax under the liability method.
A deferred tax asset, or the effect of tax losses carried forward is recognised in the financial statements only where there is the virtual certainty that the benefit of the timing differences, or losses, will be utilised.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2008, No 39
Gazette.govt.nz —
NZ Gazette 2008, No 39
✨ LLM interpretation of page content
🏭
Certification of Financial Statements and Performance Measures for Vector Limited
(continued from previous page)
🏭 Trade, Customs & Industry13 February 2008
Financial Certification, Performance Measures, Vector Limited, Electricity Information Disclosure Requirements 2004, Statement of Cash Flows