✨ Financial Accounting Policies
NEW ZEALAND GAZETTE, No. 172
27 NOVEMBER 2009
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
risk is recorded as an asset or liability using forward rate based measurement with the corresponding gains or losses recognised in the income statement. The gains or losses in the associated derivative are also recognised in the income statement.
x) Derivative Financial Instruments
The Transpower Lines Business uses derivative financial instruments to reduce its exposures to fluctuations in foreign currency exchanges rates and interest rates. The Transpower Lines Business has designated certain derivatives as hedges, which are used to reduce foreign currency exposure on purchases. These hedges are designated as fair value hedges. For fair value hedging relationships, gains or losses on hedging instruments are included in the income statement together with any change in the fair value of the hedged asset or liability.
For an instrument to qualify as a designated and effective hedging instrument, at the inception of the derivative transaction, the relationship between hedging instruments and hedged items must be documented, as must the Transpower Lines Business’s risk management objective and strategy for undertaking the hedge. Documentation is maintained upon the effectiveness of the hedge, i.e. whether the hedges are highly effective in offsetting changes in fair values of hedged items.
y) Cash Flow Statement
For the purposes of the cash flow statement, cash is considered to be cash held in bank accounts (net of bank overdrafts) plus highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value. Cash flows from certain items are disclosed net, due to the short term maturities and volume of transactions involved.
New Standards Not Yet Adopted
Transpower Lines Business has elected not to early adopt the following standards (or revisions to standards), considered to be relevant to the financial statements, which have been issued but are not yet effective. The adoption of these standards is not expected to have a material impact on the recognition and measurement of the Lines Business assets, liabilities, income and expenses.
- NZ IAS 1 Presentation of Financial Statements – effective for annual reporting periods beginning on or after 1 January 2009.
- NZ IAS 23 Borrowing Costs - effective for annual reporting purposes beginning 1 July 2009.
- NZ IAS 27 Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate – effective for annual reporting periods beginning on or after 1 January 2009.
- NZ IFRS 7 Financial Instruments Disclosures – effective for annual reporting periods beginning on or after 1 January 2009.
- NZ IFRS 4 Insurance Contracts – effective for annual reporting periods beginning on or after 1 January 2009.
- NZ IFRIC 18 Transfers of Assets from Customers - effective for annual reporting purposes beginning 1 July 2009.
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NZ Gazette 2009, No 172
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Transpower New Zealand Limited Accounting Policies
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