Territory Stories

February 2008 report to the Legislative Assembly

Details:

Title

February 2008 report to the Legislative Assembly

Collection

Report to the Legislative Assembly; Reports; PublicationNT

Date

2008

Description

Made available via the Publications (Legal Deposit) Act 2004 (NT).

Notes

Date:2008-02

Language

English

Subject

Northern Territory. Auditor-General's Office -- Periodicals; Finance, Public -- Northern Territory -- Accounting -- Periodicals; Northern Territory -- Appropriations and expenditures -- Periodicals

Publisher name

Northern Territory Auditor-General's Office

Place of publication

Darwin

ISSN

1323-7128

Copyright owner

Check within Publication or with content Publisher.

Parent handle

https://hdl.handle.net/10070/223559

Citation address

https://hdl.handle.net/10070/686148

Page content

148 Auditor-General for the Northern Territory February 2008 Report Power and Water Corporation cont The Power and Water Corporation has commented: Audit Qualification The Corporation recorded a net loss after tax of $69.2 million for 2006/07, after an impairment write-down in the value of water and sewerage assets of $102.5 million post-tax ($146.4 million pre-tax) resulting from the application of Australian Accounting Standard 136: Impairment of Assets. After eliminating the effects of the asset write-down, a consolidated net profit after tax of $33.3 million results. It is our understanding that the qualified audit opinion issued on the 30 June 2007 financial statements contains two elements: the qualified audit opinion issued in relation to the 30 June 2006 financial statements has carried over for the comparative information included in the 2006/07 year reports; and the impairment write-down of $146.4 million (pre-tax) reported in the financial statements at 30 June 2007 straddles the 2005/06 and 2006/07 financial years, thus resulting in the loss reported in the 2006/07 income statement to be overstated. In 2006/07, the Corporation re-engineered the financial model (using expected cash flow approach) for testing the carrying value of assets under AASB 136, in addition to obtaining independent advice on a discount rate appropriate for the Corporation. Further, substantial work was undertaken to improve the reliability of the financial projections included in the annual Statement of Corporate Intent (SCI) which formed the basis of the data inputs for the asset impairment test. The 2007/08 SCI highlighted a significant increase in investment in capital works and repairs and maintenance expenditure, thus the CPI-based tariff rises announced in 2007 were both necessary and timely. Without the tariff increases, it is likely that a more significant asset write-down would have occurred at 30 June 2007.


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