NOTES TO THE FINANCIAL STATEMENTS
04. Discontinued operations://
On 20 April 2016, Vector completed the sale of 100% of the shares in its subsidiary Vector Gas Limited (“Vector Gas”) to First State Funds. Vector Gas owned the gas transmission and non-Auckland gas distribution businesses. The disposal group is presented as discontinued operations in the comparatives in this report.
05. Revenue://
2017 $000
2016 $000
NOTE
Sales
1,159,581
3 3 3
1,092,648
Third party contributions
62,270
49,818
Other
4,802
2,137
Total
1,226,653
1,144,603
Policies
Revenue is measured at the fair value of consideration received, or receivable. Revenue is recognised when: —— The amount of the revenue and the costs in respect of the transaction can be measured reliably; and —— It is probable that the economic benefits of the transaction will flow to Vector. Sales of goods are recognised when the risks and rewards of the goods have been transferred to the buyer. Sales of services are recognised as the services are delivered, or if applicable on a percentage of completion basis. Third party contributions towards the construction of property, plant and equipment are recognised to reflect the percentage completion of the underlying construction activity. Management must apply judgement where: —— The timing of customer payments for services does not coincide with the timing of delivery of those services; and/or —— Multiple services are delivered under one contract. NZ IFRS 15 Revenue from Contracts with Customers (including subsequent amendment) NZ IFRS 15 applies to contracts to deliver goods and services to customers. Guiding principles in the standard will affect when, how, and how much revenue is recognised in an entity’s financial statements in any given reporting period. The standard and its subsequent amendment will replace all existing IFRS guidance for revenue recognition. The most relevant to Vector are: NZ IAS 18 Revenue , NZ IAS 11 Construction Contracts , and NZ IFRIC 18 Transfers of Assets from Customers . We expect the impact of NZ IFRS 15 on the group will be in respect of the timing and amount of third party contributions recognised each year. We are currently assessing contracts with customers against principles in NZ IFRS 15 to understand and quantify such impact. Revenue streams with a “use and pay” nature will likely continue to be accounted for as under current accounting practice. Examples include line revenues earned in the Regulated Networks segment, and natural gas sales made in the Gas Trading segment. We expect to provide a more detailed update on our evaluation of the financial impact of NZ IFRS 15, including its amendments, in our 2018 interim financial statements. NZ IFRS 15 is mandatory for the group’s financial year ended 30 June 2019.
Judgements
New accounting standards not yet adopted
88
Vector://AR 17
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