✨ Financial Accounting Policies
30 NOVEMBER 2009 NEW ZEALAND GAZETTE, No. 173 4213
VECTOR LIMITED & SUBSIDIARIES
GAS DISTRIBUTION ACTIVITIES
STATEMENT OF ACCOUNTING POLICIES (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2009
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I) DEPRECIATION
Depreciation of property, plant and equipment other than freehold land is calculated on a straight line basis so as to expense the cost of the property, plant and equipment, less any expected residual value, to the income statement over its useful economic life.
Depreciation commences when the item of property, plant and equipment is brought into productive use, or when such items become available for use.
| ESTIMATED | |
|---|---|
| USEFUL LIVES | |
| YEARS | |
| Distribution systems | 15 – 100 |
| Plant, vehicles and equipment | 3 – 40 |
J) LEASED ASSETS
Finance leases
Property, plant and equipment under finance leases, where substantially all the risks and rewards of ownership are assumed by the gas distribution activities as lessee, are recognised as non-current assets in the balance sheet. Leased property, plant and equipment are recognised initially at the lower of the present value of the minimum lease payments or their fair value. A corresponding liability is established and each lease payment apportioned between the reduction of the outstanding liability and the finance expense. The finance expense is charged to the income statement in each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased property, plant and equipment are depreciated over the shorter of the lease term and the useful life of equivalent owned property, plant and equipment.
Operating leases
Payments made under operating leases, where the lessors effectively retain substantially all the risks and benefits of ownership of the leased property, plant and equipment are recognised in the income statement on a straight-line basis over the lease term. Lease incentives received are recognised as an integral part of the total lease expense over the term of the lease. Property, plant and equipment used under operating leases are not recognised in the balance sheet.
Leasehold improvements
The cost of improvements to leasehold property are capitalised and depreciated over the unexpired period of the lease or the estimated useful life of the improvements, whichever is the shorter.
K) PROVISIONS
Employee entitlements
Employee entitlements to salaries and wages, annual leave, long-term leave and other benefits are recognised when they accrue to employees.
Other provisions
Provisions are estimated by discounting the expected future cash flows at a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where a provision is currently expected to be utilised within one year, or where the future actions of a third party could cause the liability to be settled within one year, the provision is not discounted.
The amortisation or unwinding of any discount applied in establishing the net present value of provisions is charged to finance costs in the income statement as the period of discounting diminishes.
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NZ Gazette 2009, No 173
✨ LLM interpretation of page content
🏭
Certification of Financial Statements and Performance Measures for Gas Distribution
(continued from previous page)
🏭 Trade, Customs & Industry23 November 2009
Financial statements, Performance measures, Gas distribution, Vector Limited, Balance sheet, Accounting policies, Income tax, Property plant and equipment, Intangible assets, Goodwill, Software, Depreciation, Leased assets, Provisions, Employee entitlements