South African Local Government Association
Schedule 3A public entity i.t.o. the Public Finance Management Act, 1999 and recognised i.t.o. the
Organised Local Government Act, 1997
Annual Financial Statements for the year ended 31 March 2017
Accounting Policies
1.6 Intangible assets (continued)
An intangible asset is regarded as having an
indefinite useful life when, based on all relevant
factors, there is no foreseeable limit to the period
over which the asset is expected to generate net
cash inflows or service potential. Amortisation
is not provided for these intangible assets, but
they are tested for impairment annually and
whenever there is an indication that the asset
may be impaired. For all other intangible assets
amortisation is provided on a straight line basis
over their useful life.
The amortisation period and the amortisation
method for intangible assets are reviewed at each
reporting date.
Amortisation is provided to write down the
intangible assets, on a straight line basis, to their
residual values as follows:
Item
Computer
software
Depreciation method Useful life
Straight-line
2 to 5 years
Intangible assets are derecognised:
•
•
on disposal; or
when no future economic benefits or
service potential are expected from its
use or disposal.
The gain or loss is the difference between the
net disposal proceeds, if any, and the carrying
amount. It is recognised in surplus or deficit
when the asset is derecognised.
1.7
Class
Category
Operating lease receivables – Financial asset
exchange transactions
measured at
amortised cost
Trade and other receivables
Financial asset
from exchange transactions measured at
amortised cost
Trade and other receivables
Financial asset
from non-exchange
measured at
transactions
amortised cost
Cash and cash equivalents
Financial asset
measured at
amortised cost
SALGA has the following types of financial
liabilities (classes and category) as reflected on
the face of the statement of financial position or
in the notes thereto:
Class
Trade and other payables
from exchange transactions
Category
Financial liability
measured at
amortised cost
Sundry payables – exchange Financial liability
transactions
measured at
amortised cost
Other payables (lodge cards) Financial liability
– exchange transactions
measured at
amortised cost
Initial recognition
SALGA recognises financial assets and liabilities
in its statement of financial position when
the entity becomes a party to the contractual
provisions of the instrument.
SALGA recognises financial assets and liabilities
using trade date accounting.
Financial instruments
A financial instrument is any contract that
gives rise to a financial asset of one entity and a
financial liability or a residual interest of another
entity.
Classification
SALGA has the following types of financial assets
(classes and category) as reflected on the face of
the statement of financial position or in the notes
thereto:
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Initial measurement of financial assets and
financial liabilities
When a financial asset or liability is recognised
initially, SALGA measures it at its fair value, plus
in the case of a financial asset or financial liability
initially not subsequently measured at fair value,
transaction costs that are directly attributable to
the acquisition or issue of the financial asset or
financial liability.
SALGA ANNUAL REPORT
2016/17