✨ Financial Statements Accounting Policies
Eastland Network Limited – Electricity Lines Business
Statement of Significant Accounting Policies
for the year ended 31 March 2007
(A) Basis of Preparation
The financial statements for the Eastland Network Limited Electricity Lines Business (the "Electricity Lines Business") have been prepared for the purpose of giving information about the Electricity Lines Business to the Commerce Commission.
The financial statements have been prepared in accordance with the Commerce Commission’s Electricity Information Disclosure Requirements 2004 on the basis of historical cost modified by the revaluation of certain items of property, plant & equipment as identified in the specific accounting policies below.
Eastland Network Limited (the Company) receives management services from a fellow subsidiary Eastland Infrastructure Limited for which it pays management fees. For the purpose of the Electricity Information Disclosure Requirements 2004, financial information from Eastland Infrastructure Limited has been used to provide a detailed breakdown of the management fee.
The Company 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 revenue, costs, assets and liabilities between the regulated Electricity Lines Business and the activities of Eastland Network Limited.
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 the 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 two main allocators used are the number of employees and the book value of property, plant and equipment. Some costs such as IT costs and non-system asset depreciation are separately analysed and allocated using allocations specific to those costs.
Allocators are also used to allocate balance sheets assets and liabilities that are not directly attributable to the Electricity Lines Business. Debt and equity are allocated to the Electricity Lines Business on the basis of the debt to equity ratio of the Company.
(B) Basis of Recognising Components of the Financial Statements
The following general accounting policies are adopted:
Assets
A transaction results in an asset being recognised in the statement of financial position when it will probably give rise to ongoing benefits for the Electricity Lines Business, and those benefits can be measured with reliability.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2008, No 55
Gazette.govt.nz —
NZ Gazette 2008, No 55
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Eastland Network Limited – Electricity Lines Business
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