― 44
2. Summary of significant accounting policies continued
COVID–19 global pandemic
The New Zealand Government (“the Government”) announced a State of National Emergency on 25 March 2020 in response to the World Health Organisation (“WHO”) declaring COVID–19 as a global pandemic on 11 March 2020, signalling the beginning of a countrywide lockdown period (Alert Level 4) frommidnight 25 March, which lasted until 28 April 2020. All non–essential services were suspended during this period, while a limited number of essential services were allowed to continue trading under guidelines from the Government. While the pandemic has impacted parts of the group’s businesses operationally, the f inancial impact in the current f inancial year has been limited. Vector’s electricity and gas distribution, supply and distribution of natural gas and LPG, metering services and telecommunication services were considered essential businesses and continued to trade through Alert Level 4. The energy solutions business and meters deployment work in New Zealand were suspended in line with the Government’s guidelines. As New Zealand moved out from Alert Level 4 and the subsequent Alert Level 3 periods in mid May, all of Vector’s New Zealand businesses have resumed by 30 June 2020. Vector’s Australia metering business, while also curtailed to some degree by differing pandemic response rules imposed by state governments in Australia, was able to operate under essential services capacity during the last quarter of the current f inancial year. The impact to the business was not material. In respect of the balance sheet, the table below provides a summary of assessment by the Board on key areas impacted by COVID–19, based on information available at the time the f inancial statements are approved.
NOTE
Contingent consideration 5,18 Contingent consideration from the sale of Vector’s Kapuni interests is recorded at fair value. Commodity prices used to calculate the initial fair value recorded at 31 March 2020 have reflected the impact of COVID–19, which was declared a global pandemic by the WHO on 11 March 2020. Trade and other receivables 9 The group has not seen a signif icant increase in doubtful debts throughout and after Alert Level 4 in New Zealand and similar restrictive period in Australia.
Specif ic circumstances pertaining to individual customers are assessed and considered in the provision for doubtful debts, but the pandemic has not had a material impact on the group’s assessment of expected credit losses at balance date.
Intangible assets 10 In respect of impairment testing COVID–19 restrictions imposed by the Government have had an impact on the business performance of the E–Co Products CGU and have contributed, in part, to impairment recognised in the CGU in the current year. Investment in private equity 13,18 Investment in private equity is recorded at fair value. The
carrying amount reflects future cash flow forecasts of the investee at balance date, which have been impacted by COVID–19. 15 The group recognised a reduction in deferred tax liability of $3.5 million as a result of the COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020 having reinstated Vector’s ability to deduct non-residential building depreciation for tax purposes.
Deferred tax
THE INTERPLAY OF TODAY AND TOMORROW
Made with FlippingBook Learn more on our blog