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
Notes to the Annual Financial Statements
Figures in Rand
26.
2017 2016
- (62 196)
54 152
54 152 (62 196)
287 301
Impairment of assets (continued)
Reversal of impairments
Intangible assets
Impairment previously recognised on intangible assets reversed due to
the change in the intent/commitment to use the compliance software to
enhance the functionality of the compliance unit, thereby significantly
increasing the need for the intangible asset service potential (2016:
-R49 156). The recoverable service amount of the asset is based on its
value in use.
A software application has been assessed to have an indefinite useful
life (impairment testing) that has also significantly increased the need
for the asset’s service potential (2016: -R13 040). The recoverable service
amount of the asset is based on its value in use.
Total impairment losses recognised (reversed)
The main classes of assets affected by impairment losses are:
•
•
•
Furniture and fixtures - R 28 588 (2016: Nil)
IT equipment - R 16 535 (2016: R 349 497)
Office equipment - R 9 029 (2016 Nil)
The main events and circumstances that led to the recognition of these impairment losses are as
follows:
•
•
•
Furniture and fixtures in the SALGA Free State office were damaged by water flooding, resulting
in these assets having no service potential.
IT equipment - these assets are not required for the delivery of services to members, either
currently, or over the longer planning period due to technological obsolescence.
Office equipment - these assets are not required for the delivery of services to members, either
currently, or over the longer planning period and some have evidenced physical damage to
the asset.
The main classes of intangible assets affected by impairment reversal are as follows:
•
Computer software – Nil (2016: -R62 196)
Value in use
In determining the recoverable amount of the assets subjected to impairment SALGA considered the
following:
•
•
•
Usefulness of the assets and their current state. SALGA’s IT department/experts that the
intangible assets have an indefinite useful life and will be assessed annually for usefulness.
The intention of management on the current use of the assets and upgrades effected on
specific assets.
The nature/classes of the assets affected, being both intangible and tangible i.e. software,
furniture and fittings and office equipment.
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