✨ Financial Statements Notes
Notes to the Consolidated Financial Statements (Continued)
c) Avoidable Cost Allocation Methodology
The Avoidable Cost Allocation Methodology as described in the Electricity Information Disclosure Handbook has been used to separate "Other" activities from Electricity Invercargill Limited and PowerNet Limited. Other activities or non Line Business activity has been excluded from these accounts.
d) Receivables
Receivables are stated at their estimated realisable value. All known losses are written off in the period in which it becomes apparent the debts are not collectable.
e) Inventories
Inventories are stated at the lower of cost (at weighted average cost price) and net realisable value.
f) Property, Plant and Equipment
All property, plant and equipment is initially recorded at cost less accumulated depreciation. The cost of purchased property, plant and equipment is the fair value of the consideration given to acquire the assets and the value of other directly attributable costs which have been incurred in bringing the assets to the location and condition necessary for their intended service.
Revaluation
The Electricity Invercargill Limited network assets were revalued on 31 March 2007 by means of a Directors' Revaluation to assessed fair value. The assessed fair value was achieved by taking the previously revalued assets at their 1 April 2004 carrying values, and updating those values in terms of today's material and labour costs.
Network assets are revalued on a cyclical basis with no asset being recognised at a valuation undertaken more than five years previously.
Revaluation increments are transferred to the Asset Revaluation Reserve.
g) Depreciation
Property, plant and equipment is depreciated on the basis of valuation or cost price less estimated residual value over the period of their estimated useful life.
The depreciation rates that reflect the economic life of the various classes of assets are:
| Buildings | 1.0%–15.0% | Straight line/diminishing value |
| Plant and Equipment | 5.0%–48% | Straight line/diminishing value |
| Office Furniture and EDP Equipment | 9.0%–80.4% | Straight line/diminishing value |
| Network Assets | 1.4%–15.0% | Straight line |
h) Impairment
If the estimated recoverable amount of an asset is less than its carrying amount, the asset is written down to its estimated recoverable amount and an impairment loss is recognised in the Statement of Financial Performance.
i) Income Tax
The income tax expense charged against the profit for the year is the estimated liability calculated at 33 cents in the dollar in respect of that profit.
j) Capital Work In Progress
Capital Work In Progress is stated at cost and is not depreciated.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2008, No 44
Gazette.govt.nz —
NZ Gazette 2008, No 44
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Electricity Invercargill Limited Line Business Financial Statements
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