annual report 2010 - 2011 - Intsika Yethu Municipality

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Due to the fact that the municipality has taken advantage of the transitional provisions, investment property were not recognised and measured in accordance with the Standards of GRAP on: Investment property, the Presentation of Financial Statements and Non-current Assets Held for Sale and Discontinued Operation. Investment property acquired prior to the date of initial adoption of the Standard of GRAP are measured at provisional amounts (Nil value) in line with Directive 4. Additions to investment property since the Standard of GRAP of Investment property was initially adopted are recognised at cost. No depreciation is recognised on these assets as all the related elements of the depreciation calculation could not be considered at year end. No measurement adjustments were made for the year ending 20 June <strong>2010</strong>. 5 FINANCIAL INSTRUMENTS 5.1 CLASSIFICATION The classification of financial assets and liabilities into categories, is based on judgement by management. The municipality classifies financial assets and financial liabilities into the following categories: The municipality has various types of financial instruments and these can be broadly categorised as either financial assets or financial liabilities. A financial asset is any asset that a cash or contractual right to receive cash or another financial asset or equity. The municipality has the following types of financial assets: - Investments in fixed deposits (banking institutions) - Consumer debtors - Certain other debtors - Short-term investment deposits - Bank balances and cash The financial assets of the municipality are classified as follows into the four categories allowed: Type of financial asset Classification in terms of IAS 39.09 Short-term investment deposits Held-to-maturity investments Bank balances and cash Loans and receivables Consumer debtors Loans and receivables Other debtors Loans and receivables Investments in fixed deposits Held-to-maturity investments Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months, which are classified as non-current assets. Loans and receivables are recognised initially at cost which represents fair value. After initial recognition financial assets are measured at amortised cost, using the effective interest rate method less a provision for impairment. Held-to-maturity investments are financial assets with fixed or determinable payments and fixed maturity where the municipality has the positive intent and ability to hold the investment to maturity. INTSIKA YETHU LOCAL MUNICIPALITY / 54
Cash includes cash on hand (including petty cash) and cash with banks (including call deposits). Cash equivalents are short-term highly liquid investments, readily convertible into known amounts of cash, that are held with registered banking institutions with maturities of three months or less and are subject to an insignificant risk of change in value. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held on call with banks, net of bank overdrafts. The municipality categorises cash and cash equivalents as financial asset: loans and receivables. A financial liability is a contractual obligation to deliver cash or another financial asset to another entity. The municipality has the following types of financial liabilities: - Long-term liabilities - Certain other creditors - Short-term loans - Current portion of long-term liabilities There are two main categories of financial liabilities, the classification determining how they are measured. Financial liabilities may be measured as: - Fair value through profit or loss; or - Other financial liabilities Financial liabilities that are measured at fair value through profit or loss are financial liabilities that are essentially held for trading (i.e. purchased with the intention to sell or repurchase in the short term; derivatives other than hedging instruments or are part of a portfolio of financial instruments where there is recent actual evidence of short-term profiteering or are derivatives). Financial liabilities that are measured at fair value through profit or loss are stated at fair value, with any resulting gain or loss recognised in the Statement of Financial Performance. Any other financial liabilities are classified as “other financial liabilities” and are initially measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. In accordance with IAS 39.09 the financial liabilities of the municipality are all classified as “other financial liabilities”. Classification depends on the purpose for which the financial instruments were obtained / incurred and takes place at initial recognition. Classification is re-assessed on an <strong>annual</strong> basis, except for derivatives and financial assets designated as at fair value through surplus or deficit, which shall not be classified out of the fair value through surplus or deficit category. 5.2 INITIAL RECOGNITION Financial instruments are initially recognised at fair value. 5.3 SUBSEQUENT MEASUREMENT Financial Assets are categorised according to their nature as either financial assets at fair value through profit or loss, held-to maturity, loans and receivables, or available for sale. Financial liabilities are categorised as either at fair value through profit or loss or financial liabilities carried at amortised cost (“other”). The subsequent measurement of financial assets and liabilities depends on this categorisation and, in the absence of an approved GRAP Standard on Financial Instruments, is in accordance with IAS 39. INTSIKA YETHU LOCAL MUNICIPALITY / 55
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INTSIKA YETHU LOCAL MUNICIPALITY |
Page 4 and 5: FOREWORD BY THE MUNICIPAL MANAGER I
Page 6 and 7: Lokishini - C 3 Mtwaku - B Mtwaku -
Page 8: MEMBERS OF EXECUTIVE COMMITTEE Hon
Page 11 and 12: 4. Trends on total personnel expend
Page 14 and 15: Chapter TWO Basic Service delivery
Page 16 and 17: • Implementation of current legis
Page 19 and 20: CHAPTER THREE MUNICIPAL LOCAL ECONO
Page 21 and 22: The key issues relating to IYM spat
Page 23 and 24: Intensify Enterprise support and bu
Page 26 and 27: In order to come out with spatial d
Page 28 and 29: • Strategic Development Zones •
Page 30 and 31: However, this study has identified
Page 32 and 33: Number Property Application Applica
Page 34 and 35: Basic service delivery area 30 June
Page 36 and 37: Reporting Level Detail Total Cost -
Page 38 and 39: ROLE PLAYERS Roles RESPONSIBILITIES
Page 40 and 41: 1.27 SPATIAL PLANNING PREPARATION A
Page 42 and 43: A vast number of cases are identifi
Page 44 and 45: Intsika Yethu Municipality STATEMEN
Page 46 and 47: Intsika Yethu Municipality STATEMEN
Page 48 and 49: Intsika Yethu Municipality SUMMARY
Page 50 and 51: Application of all of the above GRA
Page 52 and 53: 3 INTANGIBLE ASSETS 3.1 INITIAL REC
Page 56 and 57: 5.3.1 INVESTMENTS Investments, whic
Page 58 and 59: Operating leases are those leases t
Page 60 and 61: 13.2 DEFINED CONTRIBUTION PLANS A d
Page 62 and 63: Intsika Yethu Municipality NOTES TO
Page 64 and 65: 3 TRADE RECEIVABLES FROM EXCHANGE T
Page 66 and 67: Intsika Yethu Municipality NOTES TO
Page 76 and 77: Planning by Reviewed Performed by F
Page 78 and 79: Intsika Yethu Municipality Annual F
Page 84 and 85: Report of the Auditor General To th
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Intsika Yethu Municipality Annual F
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Development Bank of South Africa 3
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Computers - software & programming
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Intsika Yethu Municipality Appendix
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Reason for delay/withholdi ng of fu
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NOTES
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Intsika Yethu Municipality Privave
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annual report 2010 - 2011 - Intsika Yethu Municipality

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