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notes to the financial Statements
for the year ended 31 March 2012
Interest income is recognised as it accrues, using the effective interest method.
Gifted assets to the network, such as electricity reticulation of subdivisions, are recognised as revenue.
Generation income is recognised when electricity generated is sold on the wholesale market. As this is sold
to one retailer it is deemed to be operating lease income but recognised as generation income in note 4 for
ease of understanding. Future operating lease revenue has not been disclosed because it cannot be reliably
estimated due to it’s dependancy on generation volumes.
Dividend income from subsidiaries is recognised when declared.
q) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are substantially ready for their intended use or
sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure
on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
r) Cash flow statement
Cash flows for the report periods are categorised into operating, investing and financing activities. Operating
activities are disclosed using the direct method, whereby major classes of cash receipts from customers and
cash payments to suppliers and employees are disclosed for operating activities. Cash receipts and payments
are shown inclusive of GST. Investing activities include the purchase and disposal of assets, shown exclusive of
GST. Financing activities include loans drawn and/or repaid and finance raised from shareholders equity holders
or dividends paid to shareholders.
Cash flows from operating activities are reconciled to net profit after tax, by accounting for non-cash
transactions and changes in working capital.
s) Adoption of new and revised Accounting Standards
Standards and Interpretations effective in the current period
A number of Standards and Interpretations became effective in the current period:
Amendments to NZ IAS 24 ‘Related Party Disclosures’
•
NZ IFRIC 19 ‘Extinguishing Financial Liabilities with Equity Instruments’
•
Amendments to NZ IFRIC 14 ‘Prepayments of a Minimum Funding Requirement’
•
Improvements to New Zealand Equivalent to International Financial Reporting Standards 2010
•
- Improvements to NZ IFRS 3 and NZ IAS 27
- Improvements to other standards
Amendments to NZ IFRS 7 - Appendix E
•
The adoption of these interpretations has not led to any changes in the Group’s accounting policies.
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