Page 36 - NZPM Annual Report 2017

NZPM GROUP ANNUAL REPORT 2017

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

For the year ended 31 March 2017

between the Group and its associates are FOREIGN CURRENCY TRANSLATION
eliminated to the extent of the Group’s interest in
the investee. Functional currency
Items included in the financial statements of each
Where a business combination is achieved in of the Group’s entities are measured using the
stages, previously held equity interests in the currency of the primary economic environment
acquiree are remeasured to fair value at the in which the entity operates (the “functional
acquisition date and any corresponding gain or currency”).
loss is recognised in the statement of financial
performance. Transactions and balances
Transactions in foreign currencies are translated
Subsidiaries and associates to New Zealand dollars at rates approximating
Subsidiaries are all entities over which the Group the foreign exchange rates ruling at the dates of
has control. The Group controls an entity when the transactions. Monetary assets and liabilities
the Group is exposed to, or has rights to, variable denominated in foreign currencies at the balance
returns from its involvement with the entity and has date are translated to New Zealand dollars at
the ability to affect those returns through its power foreign exchange rates ruling at that date. Non-
to direct the activities of the entity. Subsidiaries are monetary assets and liabilities that are measured
included in the consolidated financial statements in terms of historical cost in a foreign currency are
using the acquisition method of consolidation, translated using the exchange rate at the date
from the date control commences until the date of the transaction. Foreign exchange gains or
control ceases. losses are recognised in the statement of financial
performance, except when deferred in equity.
Associates are entities over which the Group has
significant influence but not control. Investments VALUATION OF ASSETS
in associates are accounted for using the equity
method and are measured in the statement of Property, plant and equipment
financial position at cost plus post-acquisition Owned assets
changes in the Group’s share of net assets,
less dividends. Goodwill relating to associates Items of property, plant and equipment are
is included in the carrying amount of the stated at cost or deemed cost less accumulated
investment. If the carrying amount of the equity depreciation and accumulated impairment
accounted investment exceeds its recoverable losses. Cost includes expenditure that is directly
amount, it is written down to the latter. When attributable to the acquisition of the item and in
the Group’s share of accumulated losses in an bringing the asset to the location and working
associate equals or exceeds its carrying value, the condition for its intended use. Where significant
Group does not recognise further losses, unless it parts of an item of property, plant and equipment
has incurred obligations or made payments on have different useful lives, they are accounted
behalf of the associate. for separately.

Fair values are assigned to the identifiable assets Capital Work In Progress
and liabilities of subsidiaries and associates of the Amounts expended on ‘capital work in progress’
Group at the date they are acquired. Acquisition are capitalised until such time as the asset is
related costs are expensed as incurred. placed in service and then is transferred to
property, plant and equipment or intangible
assets and is depreciated or amortised from
that date.

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