Vector Interim Report 2019

NOTES TO THE INTERIM FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Key revenue streams

Significant accounting policies

Impact from NZ IFRS 15 adoption

None

Sale of natural gas

The group receives revenues from customers for the provision of a continuous supply of natural gas over a time period. Revenue is recognised over time in line with the customer’s consumption of natural gas and measured at the transaction price of the contract. The transaction price for a gas supply contract includes variable consideration in the form of indexed pricing, volume pricing, and take or pay arrangements. The group estimates the amount of variable considerations present in each contract using the expected value method, which is the sum of probability- weighted amounts in a range of possible consideration amounts. Metering revenue earned from the provision of metering services is recognised over time as the customer simultaneously receives and consumes the benefits from operations of the group’s network of smart meters.

None

Metering revenue

NZ IFRS 16: Leases The group has elected to early adopt NZ IFRS 16 Leases , effective from 1 July 2018. The group applied NZ IFRS 16 using the modified retrospective transition approach. Comparative information and opening equity are therefore not restated and continue to be reported under NZ IAS 17 Leases and IFRIC 4 Determining whether an Arrangement contains a Lease . Refer to note 9 for details of accounting policies and impact from adoption of NZ IFRS 16. NZ IFRS 9: Financial Instruments NZ IFRS 9 Financial Instruments is mandatory for the group effective from 1 July 2018. The group has previously completed the adoption of NZ IFRS 9 by electing to early adopt NZ IFRS 9 (2013) Financial Instruments in the year ended 30 June 2015 (initial application 1 July 2014) and NZ IFRS 9 (2014) Financial Instruments in the year ended 30 June 2017 (initial application 1 July 2016).

New standards adopted

New standard effective and previously adopted

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Vector://IR 19

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