National Consumer Tribunal Annual Report 2011/12 National Consumer Tribunal 2011-12 | Page 85

ACCOUNTING POLICIES
for the year ended 31 March 2011
1.6.1 Revenue from exchange transactions (continued)
Filing fees
Filing fees are recognised as revenue when the right to the revenue has been established.
Investment Income
Investment income is recognised as it accrues using the effective interest rate method.
1.6.2 Revenue from non-exchange transactions
Non-exchange transactions are transactions that are not exchange transactions.
In a non-exchange transaction, the NCT either receives value from another entity
without directly giving approximately equal value in exchange, or gives value to
another entity without directly receiving approximately equal value in exchange.
When the NCT receives resources as a result of a non-exchange transaction, it recognizes
an asset and revenue when it is probable that the NCT will receive economic benefits
or service potential and it can make a reliable measure of the resources transferred.
Where the resources transferred to the NCT are subject to the fulfillment of specific
conditions, it recognizes an asset and a corresponding liability. As and when the conditions
are fulfilled, the liability is reduced and revenue is recognised.
The asset and the corresponding revenue are measured on the basis of the fair value of
the asset on initial recognition.
Non-exchange revenue transactions comprise a grant from the Department of Trade and
Industry and is recognised as revenue at the date of receipt.
1.7 Prepayments
The National Consumer Tribunal may render payment for the delivery of goods or services
in advance of the delivery of goods or the rendering of services. In this instance such
prepayment is recognised in the statement of financial position as an asset when the
payment is made, and is measured at the fair value of the consideration paid. The asset is
expensed when delivery of the goods occurs or when the service is rendered.
1.8 Leasing
Operating leases
A lease is classified as an operating lease if it does not transfer substantially all the risks and
rewards incidental to ownership. Lease payments under an operating lease are recognised
as expenses in the statement of financial position on a straight line basis over the lease
period.
Finance leases
Finance leases as per the Treasury Regulations refers to a contract that transfers the risks,
rewards, rights and obligations incidental to ownership to the lessee and is recorded as a
purchase of equipment by means of long-term borrowing. All other leases are classified
as operating leases.
Annual Report 2011
national consumer tribunal | page 83