✨ Accounting Policies
27 NOVEMBER 2009 NEW ZEALAND GAZETTE, No. 172 4161
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
i) Property, Plant and Equipment
Property, plant and equipment is recognised at cost less accumulated depreciation. Cost is determined by including all costs directly associated with bringing the assets to their location and condition for their intended use.
m) Capital Work in Progress
Capital work in progress is recorded at cost. Cost is determined by including all costs directly associated with bringing the assets to their location and condition. Finance costs incurred during the period of time that is required to complete and prepare the asset for its intended use are capitalised as part of the total cost for capital work in progress. The finance costs capitalised are based on the Transpower Lines Business’s weighted average cost of borrowing. Assets are transferred from capital work in progress to property, plant and equipment as they become operational and available for use.
n) Depreciation
Depreciation of property, plant and equipment is calculated using the straight line method to write down the cost of property, plant and equipment to its estimated residual value over its estimated useful life.
The estimated useful lives are as follows:
| Asset Type | Useful Life |
|---|---|
| Transmission lines | 20–75 years |
| Freehold buildings | 30–55 years |
| Substations | 8–55 years |
| HVDC | 3–30 years |
| Communications | 3–25 years |
| Administration assets | 3–10 years |
**o) Non Current Assets Held for Sale**Non current assets (and disposal groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Non current assets (and disposal groups) are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal groups) is available for immediate sale in its present condition and is expected to be completed within one year from the date of classification.
p) Investment Property
Investment property is property held primarily to earn rentals and/or capital gain rather than used for operational purposes. Measurement is at fair value at the reporting date. Gains or losses arising from changes in the fair value of investment property are included in the income statement in the period in which they arise.
q) Leased Assets
The Transpower Lines Business is a lessee of certain property, plant and equipment under both finance and operating leases. The Transpower Lines Business is also a lessor of certain property, plant and equipment under operating leases.
Finance leases effectively transfer all of the risks and benefits incidental to ownership to the lessee, being the Transpower Lines Business. Leased assets are depreciated over their useful lives. A corresponding liability is also established at the inception of each lease, and each lease payment is allocated between the liability and finance costs.
Under operating leases, all the risks and benefits of ownership remain with the lessor. Operating lease payments/receipts are representative of the pattern of benefits derived from the leased assets and are accordingly recognised in the income statement as expenses/revenue, in the period in which the benefits are incurred/received.
Next Page →
NZ Gazette 2009, No 172
✨ LLM interpretation of page content
🏭
Transpower New Zealand Limited Accounting Policies
(continued from previous page)
🏭 Trade, Customs & IndustryAccounting Policies, Financial Statements, Transpower, Electricity, Revenue, Goodwill, Consolidation, Property, Plant and Equipment, Capital Work in Progress, Depreciation, Non Current Assets Held for Sale, Investment Property, Leased Assets