Annual Report 2004/05 - Special Investigating Unit

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