2014/15 Annual Report

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Annual Report 2014/15 103 Accounting Policies 1. Basis of preparation The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board. These annual financial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention unless specified otherwise. They are presented in South African Rand. A summary of the significant accounting policies, which have been consistently applied in prior years, are disclosed below. 1.1 Significant judgements and sources of estimation uncertainty In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Critical accounting estimates and assumptions include: Provisions Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 10 – Provisions. Depreciation and amortisation During each financial year, management reviews the assets within property, plant and equipment and intangible assets to assess whether the useful lives and residual values applicable to each asset are appropriate. 1.2 Property, plant and equipment The cost of an item of property, plant and equipment is recognised as an asset when: it is probable that future economic benefits associated with the item will flow to the entity; and the cost of the item can be measured reliably. Property, plant and equipment are stated at historical cost less accumulated depreciation. Depreciation is calculated on a straight-line basis at rates considered appropriate to reduce the cost of the assets less their residual value over the estimated useful life. Useful life, depreciation policy and residual value are assessed annually. There has been no change in the useful live, depreciation policy and residual value in the current year. The period over which various categories of assets are depreciated is detailed below: Item Average useful life Furniture and fixtures 12 years Motor vehicles 5 years Office equipment 8 years IT equipment Computer equipment 3 years Servers 5 years GPS 3 years Cellphones 3 years Leased assets Period of the lease
Competition Commission 104 Accounting Policies (continued) 1.2 Property, plant and equipment (continued) The residual value, and the useful life and depreciation method of each asset are reviewed at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. It has been practice of the Commission to donate all assets except motor vehicles which have reached the end of the useful lives therefore residual values exist only for motor vehicles. Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous estimate unless expectations differ from the previous estimate. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The depreciation charge for each period is recognised in surplus or deficit unless it is included in the carrying amount of another asset. Items are derecognised when the asset is disposed of or when there are no further economic benefits or service potential expected from the use of the asset. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item. Impairment losses are determined as the excess of the carrying amount over the recoverable service amount and are charged to the surplus or deficit. 1.3 Intangible assets An asset is identified as an intangible asset when it: is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, assets or liability; or arises from contractual rights or other legal rights, regardless whether those rights are transferable or separate from the entity or from other rights and obligations. An intangible asset is recognised when: it is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the entity; and the cost or fair value of the asset can be measured reliably. Intangible assets are initially recognised at cost. An intangible asset acquired through a non-exchange transaction, the cost shall be its fair value as at the date of acquisition. The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date. Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets. Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows: Item Useful life Computer software, other 3 years Impairment losses are determined as the excess of the carrying amount over the recoverable service amount and are charged to the surplus or deficit. Intangible assets is subsequently measured at cost less accumulated amortisation.
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Years of Competition Enforcement 20
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Competition Commission ii Table of
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Competition Commission iv Acronyms
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Competition Commission vi General I
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2014/15 Annual Report

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