✨ Financial Accounting Policies
1476
NEW ZEALAND GAZETTE, No. 53
5 MARCH 2008
Unison Networks Limited – Lines Business
Statement of Significant Accounting Policies
For the year ended 31 March 2007
g. Income Tax
Unison adopts the liability method of accounting for deferred taxation.
The taxation charge against the surplus for the period is the estimated liability in respect of that surplus after allowance for all the permanent differences and timing differences not expected to reverse in the foreseeable future. This is the partial basis for the calculation of deferred tax.
A debit balance in the deferred tax account, arising from timing differences or income tax benefits from income tax losses, is only recognised if there is virtual certainty of realisation. The subsequent realisation of such income tax benefits is subject to the requirements of income tax legislation being met.
h. Financial Instruments
Unison has financial instruments with off-balance sheet risk for the primary purpose of reducing its exposure to fluctuations in interest rates.
Financial instruments entered into as hedges of an underlying exposure are accounted for on the same basis as the underlying exposure. Accordingly, hedge gains and losses are included in the Statement of Financial Performance when the gains or losses arising from the underlying exposures are recognised in the Statement of Financial Performance.
Financial instruments such as bank balances, bank investments, receivables, accounts payable and term debt are included in the accounts at their estimated fair value.
i. Capitalisation
Capital expenditure is defined as all expenditure incurred in the creation of a new asset, replacement of an asset that has reached the end of its economic life, or the increase in service potential of an existing asset. Constructed assets are included in property, plant and equipment as each becomes operational and available for use.
j. Cash Flows
For the purpose of the Statement of Cash Flows, cash includes cash on hand, deposits held on call with banks, and investments in money market instruments.
k. Employee Entitlements
A liability for annual leave, long service leave and retirement gratuities is accrued and recognised in the Statement of Financial Position. Liabilities for annual leave is calculated on an entitlement basis at current rates.
Retirement gratuity liability and long service leave are calculated using current rates and appropriate probabilities for all qualifying staff. The calculations are based on the net present value of the estimated future cashflow.
l. Goodwill Arising on Acquisition
Goodwill arising on acquisition of subsidiaries/businesses/assets is amortised on a straight-line basis over the period of expected benefit or 20 years, whichever is the lesser. Goodwill is tested annually for impairment.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2008, No 53
Gazette.govt.nz —
NZ Gazette 2008, No 53
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Unison Networks Limited - Lines Business Financial Position Statement
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