2005/2006 - SANParks

2005South African National ParksACCOUNTING POLICIESfor the year ended 31 March 2006Assets held under fi nance leases are recognised as assets ofthe organisation at their fair value at the date of acquisition. Thecorresponding liability to the lessor is included in the statement offi nancial position as a fi nance lease obligation. Finance costs, whichrepresent the difference between the total leasing commitments andthe fair value of the assets acquired, are charged to the statementof fi nancial performance over the term of the relevant lease so as toproduce a constant periodic rate of interest on the remaining balanceof the obligations for each accounting period.Assets acquired under leases where all the risks and benefi ts ofownership are effectively retained by the lessor are classifi ed asoperating leases. Payments made under operating leases are chargedto the statement of fi nancial performance on a straight-line basis overthe period of the lease or another basis if more representative of thetime pattern of the user’s benefi t.Where an operating lease is terminated before the lease expiry date,any payment required to be made to the lessor by way of penaltyis recognised as an expense in the period in which the terminationtakes place.1.15 Financial instrumentsRecognitionFinancial assets and fi nancial liabilities are recognised on the statementof fi nancial position when South African National Parks becomes aparty to the contractual provisions of the instrument.All “regular way” purchases and sales of fi nancial assets are initiallyrecognised using trade date accounting.Financial instruments comprise of cash and cash equivalents,investments, receivables, trade creditors, revenue received in advance,cash held to fi nance grant funded projects funded by outside institutions,leases and borrowings.MeasurementFinancial instruments are initially measured at fair value plus transactioncosts. Financial liabilities are recognised at the original debt less principalrepayments and amortisation. Subsequent to initial recognition theseinstruments are measured as set out below:Financial Assets- Trade receivablesTrade receivables are measured at original invoice amount lessprovision made for impairment of these receivables. A provisionfor impairment of the receivables is established when there isobjective evidence that it will not be possible to collect all amountsdue according to the original terms of the receivables.- Investments in insurance policiesInvestments in insurance policies are shown at the originalamount invested plus actual investment bonuses declared upto the date of the fi nancial statements. No provision is made forthe possible early withdrawal of capital and the accompanyingloss of income, since it is the intention to retain the investmentsuntil their maturity dates.- Other investmentsOther investments are shown at their respective fair values.Changes in fair value are recognised in income in the year inwhich they arise.On disposal of an investment, the difference between the net proceedsand the book value is recognised in the statement of fi nancialperformance.Financial liabilitiesAll fi nancial liabilities are measured at amortised cost, comprisingoriginal debt less principle payments and amortisations.- Trade payablesTrade and other payables are stated at their nominal value.1.16 ProvisionsProvisions are recognised when the organisation has a present legalor constructive obligation as a result of past events, it is probable thatan outfl ow of resources embodying economic benefi ts will be requiredto settle the obligation, and a reliable estimate of the amount of theobligation can be made.1.17 Cash and cash equivalentsFor the purposes of the cash fl ow statement, cash and cash equivalentscomprise cash on hand, deposits held at call with banks net of bankoverdrafts. In the statement of fi nancial position, bank overdrafts areincluded in current borrowings.1.18 Non-current assets held for saleNon-current assets (or disposal group) are classifi ed as held for saleif the carrying amount will be recovered principally through sale ratherthan through continuing use.Immediately prior to being classifi ed as held for sale, the carryingamount of the item is measured in accordance with the applicable110