New Zealand Gazette – 2010 – No. 159

Page 3999

✨ Financial Statements Details

29 NOVEMBER 2010 NEW ZEALAND GAZETTE, No. 159 3999

TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS

x) Derivative Financial Instruments
The Transpower Lines Business uses derivative financial instruments to reduce its exposures to fluctuations in foreign currency exchange 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 profit or loss 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.

Comparatives
Certain comparative figures have been changed to agree to current year classification.

New Standards Not Yet Adopted
The 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 Transpower Lines Business assets, liabilities, income and expenses.

NZ IFRS 9 Financial Instruments – effective for annual reporting periods beginning on or after 1 January 2013.

New Standards Adopted During the Period
The Transpower Lines Business adopted new standards during the period, the most significant are as follows:

NZ IAS 1 (R) Presentation of Financial Statements
Has resulted in new disclosure and presentation in the Statement of Comprehensive Income and Statement of Changes in Equity.

NZ IFRS 7 Financial Instruments: Disclosures
The Transpower Lines Business has disclosed where its valuations of Financial Instruments fall within the three level fair value hierarchy.

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