3. PPECB Annual Report 2009-2010

c) Standards, interpretations and amendments to publishedstandards that are not yet effective.Certain new standards, amendments and interpretations toexisting standards have been published that are mandatoryfor the Board’s accounting periods beginning on or after 1April 2010 or later periods but which the Board has not earlyadopted, as follows:GRAP 18, Segment reportingGRAP 21, Impairment of non-cash-generating assetsGRAP 23, Revenue form non exchange transactionsGRAP 24, Budget informationGRAP 25, Employee benefitsGRAP 26, Impairment of cash generating assetsGRAP 104, Financial instrumentsIAS 17 (AC 105), LeasesIAS 27 (AC 132) Revised, Consolidated and SeparateFinancial Statements ( effective July 2009)IFRS 3 Revised, Business Combinations(effective July 2009)IFRIC 17 (AC 446), Distribution of non cash assets to ownersIFRIC 18 (AC 451), Transfer of assets from customersManagement have considered the above and concluded thatit will not have a material effect on the Board's results. Thiswill be reassessed in the future.directly to revaluation reserve. Decreases that offset previousincreases of the same asset are charged against revaluationreserve directly in equity; all other decreases are charged tothe statement of financial performance.Land is not depreciated. Depreciation on other assets iscalculated using the straight-line method to allocate theircost or revalued amounts to their residual values over theirestimated useful lives. The useful lives are approximately:BuildingsFurniture and equipmentTechnical equipmentMotor vehiclesComputer equipment50 years3 - 10 years3 - 8 years5 years3 - 7 yearsCosts associated with developing or maintaining computersoftware programmes are recognised as an expense asincurred. Minor assets of R5 000 or less are charged to thestatement of financial performance in full as an expenditurein the year purchased.The assets’ residual values and useful lives are reviewed, andadjusted if appropriate, at each balance sheet date. An asset’scarrying amount is written down immediately to its recoverableamount if the asset’s carrying amount is greater than itsestimated recoverable amount.2.2 Property, Equipment and VehiclesLand and building comprise mainly office buildings. Freeholdland and buildings are shown at fair value, based on valuationsby external independent valuers every three years, lesssubsequent depreciation for buildings. Any accumulateddepreciation at the date of revaluation is eliminated againstthe gross carrying amount of the asset, and the net amountis restated to the revalued amount of the asset. All otherproperty and equipment is stated at historical cost lessdepreciation. Historical cost includes expenditure that isdirectly attributable to the acquisition of the items.Subsequent costs are included in the asset’s carrying amountor recognised as a separate asset, as appropriate, only whenit is probable that future economic benefits associated withthe item will flow to the Board and the cost of the item canbe measured reliably. All other repairs and maintenance arecharged to the statement of financial performance duringthe financial period in which they are incurred.Increases in carrying value arising on revaluation are creditedGains and losses on disposals are determined by comparingproceeds with carrying amount. These are included in thestatement of financial performance. When revalued assetsare sold, the amounts included in revaluation reserve aretransferred to reserve funds.2.3 Impairment of Non-financial AssetsAssets that have an indefinite useful life, such as land, arenot subject to amortisation and are tested annually forimpairment. Assets that are subject to amortisation arereviewed for impairment whenever events or changes incircumstances indicate that the carrying value may not berecoverable. An impairment loss is recognised for the amountby which the asset's carrying amount exceeds its recoverableamount. The recoverable amount is the higher of theasset's fair value less costs to sell and value in use. For thepurpose of assessing impairment, assets are grouped at thelowest levels for which there are separately identifiable cashflows. Non-financial assets that suffered an impairment arereviewed for possible reversal of the impairment at eachreporting date.74PPECB | annual report | 2009 - 2010