✨ Financial Accounting Policies
Fair value hedges
Hedge accounting is discontinued when the hedge instrument expires or is sold, terminated or no longer qualifies for hedge accounting. The adjustments to the carrying amount of the hedge item arising from the hedged risk is amortised to the profit or loss component of the Comprehensive Income Statement.
d) Dividend distribution
Dividend distributions are recognised as a liability in the balance sheet in the period in which the equity holders right to receive payment has been established.
e) Employees entitlements
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long-service leave and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.
Provisions made in respect of employee benefits that are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Division in respect of services provided by employees up to reporting date.
Superannuation plans
For defined contribution superannuation plans, the Division recognises and expenses the obligation during the period they arise.
There are a small number of employees that are part of a state-defined benefit superannuation plan. The Division has no legal or constructive obligation to pay future benefits that are guaranteed by the Crown. As a result the plans are accounted for as a defined contribution plan.
f) Financial assets
Financial assets are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned. They are initially measured at fair value plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.
Subsequent to initial recognition, investments in subsidiaries are measured at cost less impairment.
Other financial assets are classified into one of four categories: financial assets at fair value through profit or loss; held to maturity investments; available for sale financial assets; or loans and receivables. At balance date the Division had the following classes of financial assets:
Financial assets at fair value through profit or loss
Other financial assets relate to derivatives held at year end. All derivative assets are measured at fair value through profit or loss, except for derivatives that are designated effective cash flow hedges. Effective cash flow hedges are measured at fair value with the movement on these assets recorded within other comprehensive income in the Comprehensive Income Statement. Refer to (c) for the accounting policy on derivative financial instruments.
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NZ Gazette 2012, No 132
✨ LLM interpretation of page content
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Gas Division Statement of Accounting Policies
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🏭 Trade, Customs & IndustryAccounting Policies, Financial Statements, Gas Division, Fair Value Hedges, Dividend Distribution, Employee Entitlements, Superannuation Plans, Financial Assets