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
1.17 Investment revenue
1.16 Revenue from non-exchange
transactions
Non-exchange transactions are defined as
transactions where the entity receives value
from another entity without directly giving
approximately equal value in exchange.
Transfers are inflows of future economic
benefits or service potential from non-exchange
transactions, other than taxes.
Investment revenue is recognised on a time-
proportion basis using the effective interest
method.
1.18 Budget information
General purpose financial reporting by SALGA
shall provide information on whether resources
were obtained and used in accordance with the
legally adopted budget.
Recognition and measurement
An inflow of resources from a non-exchange
transaction recognised as an asset is recognised
as revenue, except to the extent that a liability is
also recognised in respect of the same inflow.
As SALGA satisfies a present obligation recognised
as a liability in respect of an inflow of resources
from a non-exchange transaction recognised as
an asset, it reduces the carrying amount of the
liability recognised and recognises an amount of
revenue equal to that reduction.
Where a liability is required to be recognised
it will be measured as the best estimate of the
amount required to settle the obligation at the
reporting date.
The annual financial statements and the
budget are prepared on a comparable basis of
accounting, therefore a comparison with the
budgeted amounts for the reporting period have
been included in the notes to the annual financial
statements.
1.19 Translation of foreign currencies
Foreign currency transactions
A foreign currency transaction is recorded, on
initial recognition in Rand, by applying to the
foreign currency amount the spot exchange rate
between the functional currency and the foreign
currency at the date of the transaction.
At each reporting date:
Revenue is measured at the fair value of the
consideration received or receivable, net of trade
discounts and volume rebates.
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Transfers
Apart from services in kind, which are not
recognised, SALGA recognises an asset in respect
of transfers when the transferred resources meet
the definition of an asset and satisfy the criteria
for recognition as an asset.
Transferred assets are measured at their fair value
as at the date of acquisition.
Gifts and donations
Gifts and donations are recognised as assets
and revenue when it is probable that the future
economic benefits or service potential will flow
to SALGA and the fair value of the assets can be
measured reliably.
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foreign currency monetary items are
translated using the closing rate;
non-monetary items that are measured
in terms of historical cost in a foreign
currency are translated using the
exchange rate at the date of the
transaction; and
non-monetary items that are measured
at fair value in a foreign currency are
translated using the exchange rates at the
date when the fair value was determined.
Exchange differences arising on the settlement
of monetary items or on translating monetary
items at rates different from those at which they
were translated on initial recognition during the
period or in previous annual financial statements
are recognised in surplus or deficit in the period
in which they arise.
SALGA ANNUAL REPORT
2016/17