✨ Financial Statements Analysis
3 DECEMBER 2010 NEW ZEALAND GAZETTE, No. 166 4149
Critical Accounting Estimates and Assumptions
In preparing these financial statements the Company has made estimates and assumptions concerning the future which may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
At each balance date the Company reviews the useful lives and residual values of its property, plant and equipment. Assessing the appropriateness of useful life and residual value estimates of property, plant and equipment requires the Company to consider a number of factors such as the physical condition of the asset, expected period of use of the asset, and expected proceeds from the sale of the asset.
An incorrect estimate of the useful life or residual value will impact on the depreciable amount of an asset, therefore impacting on the depreciation expense recognised in the statement of comprehensive income, and carrying amount of the asset in the statement of financial position. The Company minimises the risk of this estimation uncertainty to its infrastructure assets by:
- an annual review by an independent contractor of the value of the infrastructure assets
- physical inspection of assets
- asset replacement programmes
- review of second hand market prices for similar assets
- analysis of previous assets sales, and
- completing a revaluation of the infrastructure assets every third year.
The Company has not made significant changes to past assumptions concerning useful lives and residual values. The carrying amounts of property, plant and equipment are disclosed in note 4.
Changes in Accounting Policies
There have been no changes in accounting policy. All policies have been applied on bases consistent with those used in the previous period.
The Company has adopted the following revisions to accounting standards during the financial year which have only had a presentational or disclosure effect:
NZ IAS 1 Presentation of Financial Statements (Revised 2007).
The standard separates disclosures in relation to owner and non owner changes in equity. The statement of changes in equity now only includes details of transactions with owners, with all non owner changes in equity presented in a single line. In addition, it introduces the statement of comprehensive income, which presents income and expense items recognised in the profit or loss, together with all other items of income or expense. The Company has adopted a single statement of comprehensive income for the year ended 30 June 2010 under the revised standard. Financial statement information for the year ended 30 June 2009 has been restated accordingly. Those items of other comprehensive income presented in the statement of comprehensive income were previously recognised directly in the statement of changes in equity.
Next Page →
NZ Gazette 2010, No 166
✨ LLM interpretation of page content
🏭
GasNet Limited Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Statements, Accounting Policies, Critical Accounting Estimates, Property Plant and Equipment, Depreciation, Useful Lives, Residual Values