Creating a new energy future – a bold vision
18. Provisions
PROVISION FOR DISTRIBUTION TO CUSTOMERS $M
DECOMMISSIONING PROVISIONS $M
PRODUCT WARRANTY $M
NOTE
OTHER $M
TOTAL $M
Balance at 30 June 2020
15.5 19.2
7.8 0.3 0.6
3.3
9.0 1.5
35.6 21.0
– –
Additions
–
–
0.6
Unwinding of discount Reversed to prof it or loss Balance at 30 June 2021
(22.8)
–
(0.7)
(3.7)
(27.2)
3
11.9
8.7
2.6
6.8
30.0
Comprising: Current Non-current
11.9
–
2.6
6.8
21.3
–
8.7
–
–
8.7
Policies
The group recognises a provision when the group has a present obligation – legal or constructive – as a result of a past event, it is more likely than not that the resulting liability will be required to be settled, and the amount required to settle can be reliably estimated.
Provision for distribution to customers
The group’s stated intention to distribute excess loss rental rebates not used to mitigate revenue shortfalls to customers on Vector’s electricity network gives rise to a constructive obligation that forms the basis of the provision.
Decommissioning
The decommissioning provisions represent the present value of the future expected costs for dismantling the depot assets situated at various regions in New Zealand. Timing of economic outflows represents management’s best estimate of the end of the useful life of the plant and associated assets.
Product warranty
The group provides for restatement costs and warranty claims on products sold or installed. Provisions are recognised when the product is sold, or the service is provided to the customer. Initial recognition is based on historical experience and subsequently revisited at each reporting date.
Other provisions
These provisions comprise amounts that may be required to be utilised within one year or a longer period dependent on ongoing negotiations with third parties involved. There are currently no foreseeable uncertainties which would be reasonably expected to lead to material changes in the amounts provided.
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