annual report 2010 - 2011 - Intsika Yethu Municipality

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13.2 DEFINED CONTRIBUTION PLANS A defined contribution plan is a plan under which the municipality pays fixed contributions into a separate entity. The municipality has no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to service in the current or prior period. The municipality’s contributions to the defined contribution funds are established in terms of the rules governing those plans. Contributions are recognised in the Statement of financial performance in the period in which the service is rendered by the relevant employees. The municipality has not further payment obligations once the contributions have been paid. 14 IMPAIRMENT OF ASSETS 14.1 IMPAIRMENT OF ASSETS The municipality assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the municipality estimates the recoverable service amount of the asset. Irrespective of whether there is any indication of impairment, the municipality also: - tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period. If there is any indication that an asset may be impaired, the recoverable service amount is estimated for the individual asset. If it is not possible to estimate the recoverable service amount of the individual asset, the recoverable service amount of the cash-generating unit to which the asset belongs is determined. The recoverable service amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. If the recoverable service amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. That reduction is an impairment loss. An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in surplus or deficit. Any impairment loss of a revalued asset is treated as a revaluation decrease. An impairment loss is recognised for cash-generating units if the recoverable service amount of the unit is less than the carrying amount of the unit. The impairment loss is allocated to reduce the carrying amount of the assets of the unit as follows: - to the assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit. A municipality assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for assets may no longer exist or may have decreased. If any such indication exists, the recoverable service amounts of those assets are estimated. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. INTSIKA YETHU LOCAL MUNICIPALITY / 60
A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation is recognised immediately in surplus or deficit. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase. 14.2 TRANSITIONAL PROVISIONS In terms of Directive 4 the municipality are not required to measure Property, plant and equipment, Intangible assets and Investment Property for reporting periods beginning on or after a date within three years following the date of initial adoption of the relevant Standard of GRAP. The Standard of GRAP on Property, Plant and Equipment, Intangible assets and Investment Property was initially adopted on 1 July 2009. Due to the fact that the municipality has taken advantage of the transitional provisions, the municipality have not assess impairment. 15 VALUE ADDED TAX The Municipality accounts for Value Added Tax on the payment basis. 16 TRANSITIONAL PROVISIONS The Municipality has taken advantage of the transitional provisions for Medium and Low Capacity Municipalities as set out in Directive 4 paragraph .63 to .70 (Investment property), .73 to .83 (Property, plant and equipment) and .110 to .118 (Intangible assets) issued by the Accounting Standards Board. This further brings into effect paragraph .94E of Directive 4 which indicates that municipalities are not required to recognise provisions (which form part of the cost of an asset) in their financial statements as a result of applying the transitional provisions in other Standards of GRAP and are required to apply the disclosure requirements about the provisions related to those assets in accordance with the relevant GRAP standard. INTSIKA YETHU LOCAL MUNICIPALITY / 61
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INTSIKA YETHU LOCAL MUNICIPALITY |
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FOREWORD BY THE MUNICIPAL MANAGER I
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Lokishini - C 3 Mtwaku - B Mtwaku -
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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 54 and 55: Due to the fact that the municipali
Page 56 and 57: 5.3.1 INVESTMENTS Investments, whic
Page 58 and 59: Operating leases are those leases t
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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