✨ Accounting Policies
4160 NEW ZEALAND GAZETTE, No. 172 27 NOVEMBER 2009
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
d) Goods and Services Tax (GST)
The income statement and the cash flow statement are prepared so that all components are stated exclusive of GST. All items in the balance sheet are stated exclusive of GST with the exception of receivables and payables, which include GST.
e) Accounts Receivable
Accounts receivable are recorded initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less any provision for doubtful debts.
f) Inventories
Stocks of materials are recorded at the lower of cost and net realisable value after due consideration for excess and obsolete items. Cost is determined on a weighted average basis.
g) Investments
Fair value through profit or loss
Investments (excluding Fonterra shares and derivatives) are designated as fair value through profit or loss on the basis of preventing an “accounting mismatch”. The Transpower Lines Business’s net debt and derivatives are managed as one integrated portfolio; therefore, measuring derivatives and net debt on different bases would create a recognition inconsistency or accounting mismatch.
Fair values of quoted investments are based on prices current at balance date. If the market for a financial asset is not active, fair value is established by using valuation techniques including recent arm’s length transactions, reference to similar instruments, discounted cash flow analysis and option pricing models. Where the fair value of equity instruments cannot be reliably determined, the investments are recorded at historical cost.
h) Other Financial Assets at Fair Value through Profit or Loss
Other assets at fair value through profit or loss are derivatives. Derivatives are designated as held for trading unless they are designated as hedging instruments in a hedging relationship. Realised and unrealised gains and losses arising from changes in the fair values are included in the income statement in the period in which they arise.
i) Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not traded in an active market. These assets are carried at amortised cost using the effective interest rate method.
j) Trade and Other Payables
Trade and other payables are carried at amortised cost. They represent liabilities for goods and services provided to the Transpower Lines Business prior to the end of the financial year that are unpaid.
Provisions are liabilities of uncertain timing or amount. They are measured at the amounts expected to be paid when the liabilities are settled.
k) Available for Sale Financial Assets
Available for sale financial assets are non-derivatives that are either designated as available for sale by management or not designated in any of the other categories. These investments are carried at fair value with any unrealised gains and losses arising from changes in fair value recognised directly in equity. On sale or on impairment, the accumulated fair value adjustments are included in the income statement.
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NZ Gazette 2009, No 172
✨ LLM interpretation of page content
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Transpower New Zealand Limited Accounting Policies
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🏭 Trade, Customs & IndustryAccounting Policies, Financial Statements, Transpower, Electricity, Revenue, Goodwill, Consolidation