✨ Financial Statements
POWERCO LIMITED
Electricity Division
Statement of Accounting Policies for the Financial Statements
for the Period ended 31 March 2007
Reporting Entity
These financial statements represent the performance, position and cash flows of Powerco Limited’s electricity business (Powerco electricity division).
The financial statements are presented in accordance with the Electricity Information Disclosure Requirements issued 31 March 2004.
The financial statements have been derived from the management accounts of Powerco Limited, which were prepared in accordance with New Zealand equivalents to international financial reporting standards (NZ IFRS), as appropriate for profit-orientated entities.
The financial statements were approved for issue on 25th February 2008.
Critical accounting estimates and judgements
In the process of applying the division’s accounting policies management have made no judgements that have had a significant effect on the amounts recognised in the financial statements, other than the judgements used in the basis of preparation noted below.
There are no key assumptions concerning the future and other key sources of estimation uncertainty at 31 March 2007, that have had a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.
Basis of preparation
The financial statements have been prepared on the historical cost basis, except for certain borrowings and financial instruments and certain items of property, plant and equipment as identified in specific accounting policies below. Network assets are carried at Optimised Deprival Value (ODV). Financial derivatives are carried at fair value and borrowings which have effective fair value hedges are carried at amortised cost adjusted for the fair value of interest rate risk covered by the effective hedge.
The Powerco group has adopted a policy to apply the avoidable cost allocation methodology (ACAM) described in the Electricity Information Disclosure Handbook 31 March 2004, for the allocation of revenues, costs, assets and liabilities between the regulated businesses and other activities of the company.
The electricity lines business is treated as separate regulated standalone business.
The costs have been allocated on the following basis:
- Direct allocation of all components of financial statement items which are directly attributable to the specific businesses.
- For any components of financial statement items that are not directly attributable to a specific business:
- By assessing the proportions of those components which are avoidable and non-avoidable; and
- Allocating those components amongst the businesses on the basis of those proportions using an appropriate cost allocator.
The main allocators used are based on key cost/revenue drivers such as directly allocated revenue, costs, system line length, number of inter connection points (ICPs) and the carrying value of property plant and equipment.
All costs not allocated to the standalone electricity lines business, are allocated to other businesses within the Powerco group. Other businesses are not disclosed within these financial information disclosure statements.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2008, No 46
Gazette.govt.nz —
NZ Gazette 2008, No 46
✨ LLM interpretation of page content
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Statement of Accounting Policies for Powerco Limited – Electricity Division
(continued from previous page)
🏭 Trade, Customs & Industry25 February 2008
Accounting Policies, Financial Statements, Powerco Limited, Electricity Division, Reporting Entity, Critical Accounting Estimates, Basis of Preparation