39
2017 WEL Networks
|
Annual Report
wel.co.nz
by Waikato Networks Limited. Goodwill also arises on
the acquisition of the Velocity network assets from
Waikato Networks Limited, using predecessor
accounting provisions.
Goodwill impairment reviews are undertaken annually or
more frequently if events or changes in circumstances
indicate a potential impairment.
The carrying value of goodwill is compared to the
recoverable amount, which is the higher of value in use
and the fair value less costs to sell. Any impairment
is recognised immediately as an expense and is not
subsequently reversed.
(ii)
Computer software
Costs associated with maintaining computer software
programmes are recognised as an expense as incurred.
Development costs that are directly attributable to the
design and testing of identifiable and unique software
products controlled by the Group are recognised as
intangible assets when the following criteria are met:
it is technically feasible to complete the software
product so that it will be available for use;
management intends to complete the software
product and use or sell it;
there is an ability to use or sell the software product;
it can be demonstrated how the software product will
generate probable future economic benefits;
adequate technical, financial and other resources
to complete the development and to use or sell the
software product are available; and
the expenditure attributable to the software product
during its development can be reliably measured,
this includes direct labour costs and relevant
overhead costs.
Computer software development costs recognised as
assets are amortised over their estimated useful lives,
which does not exceed five years.
(iii)
Easements
Acquired easement rights are capitalised on the basis of
the costs incurred where the rights have an expiration date.
These costs are amortised on a straight-line basis over
their estimated useful lives (33 years).
(iv)
Leasehold Interest
Long-term leasehold interest in substation land has been
recorded at fair value. The assets will be amortised over
the period of the leases on a straight-line basis.
(j)
Investments and other financial assets
The Group classifies its financial assets in the following
categories: at fair value through profit or loss or loans and
receivables. The classification depends on the purpose
for which the financial assets were acquired. Management
determines the classification of its financial assets at
initial recognition.
(i)
Loans and receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted
in an active market. They are included in current assets,
except for maturities greater than 12 months after the end
of the reporting period. These are classified as non-current
assets. The Group’s loans and receivables comprise ‘trade
and other receivables’ and ‘cash and cash equivalents’ in
the balance sheet.
Recognition and measurement
Regular purchases and sales of financial assets are
recognised on the trade-date which is the date on which
the Group commits to purchase or sell the asset. Financial
assets carried at fair value through profit or loss are initially
recognised at fair value, and transaction costs are expensed
in the profit and loss component of the statement of
comprehensive income. Financial assets are derecognised
when the rights to receive cash flows from the investments
have expired or have been transferred and the Group has
WEL NETWORKS LIMITED
Notes to the financial statements
For the year-ended 31 March 2017
(continued)
