New cover and spine.indd - Special Investigating Unit
New cover and spine.indd - Special Investigating Unit
New cover and spine.indd - Special Investigating Unit
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38<br />
for the year ended 31 March 2005<br />
The following are the principal accounting policies of the <strong>Unit</strong> which are<br />
consistent in all material respects with those applied in the previous<br />
year, except as otherwise indicated.<br />
Basis of preparation<br />
The fi nancial statements have been prepared on the historical cost<br />
basis in accordance with South African Statements of Generally<br />
Accepted Accounting Practice.<br />
Moveable property <strong>and</strong> equipment<br />
Moveable property <strong>and</strong> equipment are stated at historical cost less<br />
depreciation. Depreciation is calculated on a straight-line method<br />
to write off the cost of each asset over its estimated useful life as<br />
follows:<br />
Offi ce furniture <strong>and</strong> equipment 5 years<br />
Computer equipment 3 years<br />
Books <strong>and</strong> law reports 5 years<br />
Motor vehicles 4 years<br />
Computer software 2 years<br />
Rented assets<br />
All costs relating to rental agreements are charged against income as<br />
incurred.<br />
Revenue<br />
Revenue comprises the annual grant from the Department of Justice<br />
<strong>and</strong> Constitutional Development, income from other departments in<br />
terms of partnership agreements to carry out specifi c engagements<br />
accounted for on an accrual basis. Incidental grants <strong>and</strong> donations are<br />
accounted for on a cash basis.<br />
Interest received<br />
Interest received is recognised on a time proportion basis.<br />
Inventory<br />
Consumable stores are valued at average cost.<br />
Cash fl ows<br />
ANNUAL REPORT 2004/05<br />
SUMMARY OF ACCOUNTING POLICIES<br />
For purposes of cash fl ow statement, cash includes cash on h<strong>and</strong>,<br />
deposits held on call with banks, investments held in money market<br />
instruments <strong>and</strong> bank overdrafts.<br />
Capital reserve<br />
Reserves equal to the book value of moveable property <strong>and</strong> equipment<br />
is refl ected as capital reserve.<br />
Post-employment benefi t costs<br />
The <strong>Unit</strong>’s contributions to the defi ned contribution provident plan are<br />
charged to the income statement in the year to which they relate.<br />
Financial instruments<br />
Financial instruments carried in the balance sheet include cash <strong>and</strong><br />
bank balances, receivables <strong>and</strong> payables.<br />
Measurement<br />
Financial instruments are initially recognised at trade date <strong>and</strong><br />
measured at cost.<br />
Subsequent to initial recognition, these instruments are measured as<br />
set out below:<br />
• Trade receivables are stated at their nominal value as reduced by<br />
appropriate allowances for estimated irre<strong>cover</strong>able amounts.<br />
• Cash <strong>and</strong> cash equivalents measured at cost plus interest income<br />
as it accrues.<br />
• Trade <strong>and</strong> other payables are stated at their nominal value.<br />
Offsetting of fi nancial assets <strong>and</strong> liabilities<br />
Financial assets <strong>and</strong> liabilities will not be offset, as there is no such<br />
legally enforceable right, <strong>and</strong> it will not be settled on a net basis nor<br />
will the asset be realised or the liability settled simultaneously.<br />
Gains <strong>and</strong> Losses<br />
Gains <strong>and</strong> losses that arise from a change in the fair value of fi nancial<br />
instruments are included in the income statement in the period in<br />
which they arise.