Territory Stories

Annual Report 2021–2022, Power and Water Corporation

Details:

Title

Annual Report 2021–2022, Power and Water Corporation

Other title

Tabled Paper 708

Collection

Tabled Papers for 14th Assembly 2020 -; Tabled Papers; ParliamentNT

Date

2022-11-23

Notes

Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.

Language

English

Subject

Tabled papers

Publisher name

Legislative Assembly of the Northern Territory

Place of publication

Darwin

File type

application/pdf

Use

Copyright

Copyright owner

Legislative Assembly of the Northern Territory

License

https://www.legislation.gov.au/Details/C2019C00042

Parent handle

https://hdl.handle.net/10070/893266

Citation address

https://hdl.handle.net/10070/893267

Page content

Annual Report 2021-2022 99 Page 48 of 60 Power and Water Corporation Notes to the financial statements for the year ended 30 June 2022 14 Property, plant and equipment (Cont'd) Valuation Techniques Power Services - Infrastructure Assets Income Approach Water Services - Infrastructure assets Income Approach WACC rate, taking into account the long term view of the market cost of capital, of 7.00% (2021: 6.25%) supportable by key assumptions in the beta range being based on analysis of observed 5-year asset betas of listed companies and gearing range being based on industry research of 5-year average debt to enterprise value ratio of the guideline listed companies. A 50 basis points decrease in the WACC or discount rate while holding other variables constant would increase the carrying amount of the carrying amount of the infrastructure assets by $158.4 million, and vice versa. Gordon Growth Method to the terminal value assumption of 2.50% (2021: 2.06%) perpetuity growth rate, supportable for longlife, critical infrastructure assets not subject to regulatory limitations on rates of return. A 50 basis points increase in the growth rate while holding other variables constant would increase the carrying amount of the infrastructure assets by $90.4 million, and vice versa. Significant unobservable inputs Sensitivity Weighted average cost of capital (WACC) rate, taking into account the long term view of the market cost of capital, of 7.00% (2021: 5.75%) supportable by key assumptions in the beta range being based on analysis of observed 5-year asset betas of listed companies and gearing range being based on industry research of 5-year average debt to enterprise value ratio of the guideline listed companies. A 50 basis points decrease in the WACC or discount rate while holding other variables constant would increase the carrying amount of the infrastructure assets t by $80.6 million, and vice versa. Regulated Asset Base (RAB) Multiple to the terminal value assumption of 1.0 (2021: 1.0). A 0.1 increase in the RAB multiple while holding other variables constant would increase the carrying value of the the carrying amount of the infrastructure assets by $72.7 million, and vice versa. There were no triggering events to require further analysis for an impairment write-down of property, plant and equipment for year ended 30 June 2022. IImmppaaiirrmmeenntt lloosssseess rreeccooggnniisseedd iinn tthhee yyeeaarr Core operational assets of Power Services and Water and Sewerage business units are valued using the income approach. Consistent with the accounting standards, the income approach has a purchaser of the business perspective and is based on the net present value of the forecasted cash flows of these businesses applying anticipated market conditions. Significant unobservable inputs in the model and sensitivity analysis are outlined below.


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