✨ Financial Judgements and Estimates
29 NOVEMBER 2010 NEW ZEALAND GAZETTE, No. 159 4037
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
31. Significant judgements or estimates
Judgements
Impairment on property assets
A significant judgement made in applying The Transpower Lines Business’s accounting policies was in relation to the impairment made of $23.9 million on Transpower’s property assets. The impairment has been based on recent valuations of properties owned. The properties relate to those on the North Island Grid Upgrade (NIGU) route between Whakamaru and south Auckland purchased for the purposes of establishing easements and then on-selling. Refer to Note 14 Property, Plant and Equipment for more information.
Taxation
Transpower has conservatively assumed that the impact of the building depreciation rule change applies to all of its buildings.
Estimates
Dismantling provision
An estimate and assumption made regarding future events was in relation to a dismantling provision. This provision has a balance at 30 June 2010 of $15.2 million (30 June 2009: $17.3 million). The nature and uncertainty of this provision is discussed in Note 18 Provisions.
Properties held for sale
An estimate has been made on the values of the properties that are classified as held for sale. These are properties purchased along the NIGU route. Transpower has used recent valuations to establish the expected net realisable value of this land and recognised an impairment of $5.2 million in relation to these properties. This is disclosed in Note 9 Non current assets held for sale.
Fair values of debt, derivatives and deposits
A key estimate is in relation to the fair values of Debt, Derivatives and Deposits. Fair values are determined upon discounting cash flows based upon the relevant yield curve. The yield curve is adjusted to reflect the credit spread of the counterparty to the transaction. These valuations are considered level two in the NZ IFRS three level valuation hierarchy.
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NZ Gazette 2010, No 159
✨ LLM interpretation of page content
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Transpower New Zealand Limited Contingencies
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🏭 Trade, Customs & IndustryFinancial Judgements, Impairment, Taxation, Dismantling Provision, Properties Held for Sale, Fair Values