41
2017 WEL Networks
|
Annual Report
wel.co.nz
approximate their fair values. The fair value of financial
liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the
current market interest rate that is available to the Group
for similar financial instruments.
(m)
Trade and other payables
Trade payables are obligations to pay for goods or services
that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current
liabilities if payment is due within one year or less (or in the
normal operating cycle of the business if longer). If not,
they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the
effective interest method.
(n)
Employee benefits
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary
benefits, annual leave and accumulated sick leave expected
to be settled within 12 months of the reporting date are
recognised in ‘other payables’ in respect of employees’
services up to the reporting date and are-measured at the
amounts expected to be paid when the liabilities are settled.
Termination benefits
Termination benefits are payable when employment is
terminated by the Group before the normal retirement date,
or whenever an employee accepts voluntary redundancy
in exchange for these benefits. The Group recognises
termination benefits when it is demonstrably committed to
either: terminating the employment of current employees
according to a detailed formal plan without possibility of
withdrawal; or providing termination benefits as a result of
an offer made to encourage voluntary redundancy.
Benefits falling due more than 12 months after the
reporting date are discounted to present value.
Employee benefits
The Group recognises a liability and an expense for
bonuses. The Group recognises a provision where
contractually obliged or where there is a past practice that
has created a constructive obligation.
(o)
Interest bearing liabilities
Interest bearing liabilities are recognised initially at fair
value, net of transaction costs incurred. Interest bearing
liabilities are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the profit and
loss component of the statement of comprehensive income
statement over the period of the borrowings using the
effective interest method.
Fees paid on the establishment of loan facilities are
recognised as transaction costs of the loan to the extent
that it is probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw-down
occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee
is capitalised as a pre-payment for liquidity services and
amortised over the period of the facility to which it relates.
(p)
Borrowing costs
General and specific 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.
All other borrowing costs are recognised in profit or loss in
the period in which they are incurred.
WEL NETWORKS LIMITED
Notes to the financial statements
For the year-ended 31 March 2017
(continued)
