Annual Report and Audited Financial Statements 2011 - The Kenya ...

Notes to the Financial Statements
for the year ended 31 Dec 2011 - Continued
NOTES (CONTINUED)
2011 2010
7. Prepaid Operating Lease Shs Shs
Cost
At start of year
Reclassified to property and equipment - 377,593
- (377,593)
At end of year
- -
Amortisation
At start of year - 83,909
Charge for the year -
Reclassified to property and equipment - (83,909)
At end of year - -
Net book value - -
Prepaid operating lease rental relate to the costs incurred to transfer plot LR 209/11320, which was donated by
the Government of Kenya to the Institute. It is leased from the Government of Kenya for a period of 99 years
from 1 March 1987. The use is restricted to Kenya Institute of Management.
During the year, the pre-paid operating lease was reclassified to property, plant and equipment. As per IAS 17
Lease, land elements can be classified as a finance lease if significant risks and rewards associated with the
land during the lease period would have been transferred from the lessor to the lessee despite there being no
transfer of title.
8. Intangible assets
2011 2010
Shs
Shs
Cost
At start of year 12,415,311 10,277,266
Additions 1,330,953 2,138,045
At end of year
13,746,264 12,415,311
Amortisation
At start of year 7,699,324 5,678,186
Charge for the year 1,814,082 2,021,138
At end of year 9,513,406 7,699,324
Net book value 4,232,858 4,715,987
Intangible assets consist of computer software development costs and specific computer software licenses.
These are amortised on the reducing balance method to write them off over their expected useful lives at the rate
of 30% p.a.
9. Organizational Performance Index (OPI) 2011 2010
Shs
Shs
At start of year 5,949,934 -
Additions 1,199,256 5,949,934
At end of year 7,149,190 5,949,934
This relates to expenses incurred in the development of the OPI assessment tool, which has been patented
by Kenya Institute of Management. OPI is an innovative excellence model to enable the development of world
class processes and innovation capability. It is a tool that asseses the effectiveness and competitivenes of an
organisational strategy. It does not have a definite useful life and is continually being developed and refined to
cope with the changes in business practices. Its useful life is not dependent on the life of other assets of the
institute. The copyright licence of this asset does not have an expiry date.
Annual Report and Audited Financial Statements 2011 39