✨ Accounting Policies
3 MARCH 2008 NEW ZEALAND GAZETTE, No. 46 1309
Allocators are also utilised to allocate balance sheet assets and liabilities that are not directly attributable to the standalone business (for instance accounts payable related to allocated cost items). Debt is allocated to the standalone business based on the carrying value of property, plant and equipment and intangibles of the Group.
The Powerco group has undertaken a review of the application of the ACAM methodology in the current year and adjusted some allocators used to ensure that ACAM is applied across the group in a consistent manner. These changes have not had a material impact on the results of the electricity lines business.
The principal accounting policies adopted are set out below.
a) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash in banks and investments in money market instruments. Bank overdrafts are shown within borrowings in the Balance Sheet.
b) Property, plant and equipment
All items of property, plant and equipment are initially recognised at cost in the Balance Sheet. Cost includes the value of consideration exchanged, or fair value in the case of donated or subsidised assets, and those costs directly attributable to bringing the item to working condition for its intended use.
Network assets are revalued to Optimised Deprival Value (ODV) every 3 years unless required more regularly under the Regulations. Additions between valuations to network assets are recognised at cost. The latest valuation was 31 March 2004. The valuation was prepared by Powerco in accordance with the ODV handbook and reviewed by KPMG.
c) Depreciation of property, plant and equipment
Depreciation is calculated on a straight-line basis for Network assets and on diminishing value basis for all other assets; to write off the cost of the assets (other than land) over the life of the assets.
Depreciation rates based on remaining useful life, for major classes of asset are:
Network assets 10 to 65 years
Plant and equipment 5 to 10 years
GIS information systems 5 to 10 years
d) Intangibles
Intangible assets are comprised of computer software. Intangible assets are stated at cost less accumulated amortisation and impairment losses.
Amortisation of intangible assets is calculated on diminishing value basis over its useful life, being 4 to 65 years.
e) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
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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