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Telecom's first regulatory financial statements raise issues

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, April 15 NZPA - The Commerce Commission has issues about the methodologies used by Telecom in the preparation of the company's first regulatory financial statements.

Telecommunications commissioner Ross Patterson today said the commission had always regarded the first year of regulatory reporting as a transition year and had highlighted areas where a re-working of the reporting requirements was likely to be needed.

Those related particularly to the attribution of income and expenses and valuation of Telecom's fixed assets.

The regulatory financial statements include detailed reports about each of Telecom's different services groups, which generally align with Telecom's Chorus, Telecom Wholesale and Telecom Retail business units.

They use economic and accounting methodologies which are different from those used in Telecom's statutory reporting, such as its annual report.

Dr Patterson said the commission acknowledged Telecom's work in producing its first regulatory financial statements, for the financial year to June 2009, on both a historical cost and current cost accounting basis, which was a lengthy and complex task.

"However, the initial regulatory financial statements have raised issues about the methodologies used in the preparation of this information."

The commission said it had reviewed Telecom's regulatory financial reporting requirements and was now consulting on proposed changes to those requirements.

Following consultation with the industry, the commission would issue any necessary revisions to the requirements for 2010.

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