2005/2006 - SANParks

2005South African National ParksACCOUNTING POLICIESfor the year ended 31 March 20061.4 Irregular and fruitless and wasteful expenditureIrregular expenditure means expenditure incurred in contravention of,or not in accordance with, a requirement of any applicable legislation,including the Public Finance Management Act, 1999 (Act No.1 of 1999),as amended.Fruitless and wasteful expenditure means expenditure that was made invain and would have been avoided had reasonable care been exercised.All irregular and fruitless and wasteful expenditure is charged againstincome in the period in which they are incurred.1.5 Borrowing costsBorrowing costs directly attributable to the acquisition, construction orproduction of qualifying assets are added to the cost of those assets, untilthe assets are substantially ready for their intended use or sale. Qualifyingassets are assets that necessarily take a substantial period to get ready fortheir intended use. Investment income earned on the temporary investmentof specifi c borrowings pending their expenditure on qualifying assets isdeducted from the cost of those assets. All other borrowing costs areexpensed in the period in which they are incurred.1.6 Foreign currenciesTransactions in currencies other than the organisation’s reporting currency(Rand) are initially recorded at the rates of exchange prevailing on the dateof the transactions. Gains and losses resulting from the settlement of suchtransactions are recognised in the statement of fi nancial performance.1.7 Retirement benefit costsSouth African National Parks operates a number of defi ned contributionplans, the assets of which are held in separate trustee-administered funds.The plans are generally funded by payments from the organisation andits employees, taking account of the recommendations of independentqualifi ed actuaries. The contributions to these funds are recognised in thestatement of fi nancial performance in the year to which they relate.1.8 Recognition of fauna and floraAs part of its mission, South African National Parks, is responsible formanaging a wide range of bio-diversity, encompassing fauna, fl ora,geological structures and unique scenery. The exact quantity and valueof these assets cannot be measured with reliable accuracy. South AfricanNational Parks, therefore does not refl ect the value of these assets in itsfi nancial statements. Produce from any biological assets are also notrecognised until sold or shown as inventory.1.9 Self InsuranceAs part of the insurance philosophy of South African National Parks, acertain amount is carried as self insurance costs, hence reducing the108