Mr LJ Mahlangu - Municipal Demarcation Board
Mr LJ Mahlangu - Municipal Demarcation Board
Mr LJ Mahlangu - Municipal Demarcation Board
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ACCOUNTING POLICIES<br />
The annual financial statements have been prepared<br />
on the accrual basis of accounting and are in<br />
accordance with historical cost convention unless<br />
specified otherwise. They are presented in South<br />
African Rand. Amounts in the financial statements<br />
are rounded to the nearest R’000.<br />
A summary of the significant accounting policies,<br />
which have been consistently applied, are disclosed<br />
below:<br />
A. BASIS OF PREPARATION<br />
The annual financial statements have been prepared<br />
in accordance with Generally Recognised<br />
Accounting Practice (GRAP), issued by the Accounting<br />
Standards <strong>Board</strong> in accordance with<br />
Section 40(1)(b) of the Public Finance Management<br />
Act (PFMA Act no 1 of 1999 as amended).<br />
Accounting policies for material transactions,<br />
events or conditions not covered by the GRAP<br />
reporting framework have been developed in accordance<br />
with paragraphs 7, 11 and 12 of GRAP<br />
3 and the hierarchy approved in Directive 5 issued<br />
by the Accounting Standards <strong>Board</strong>.<br />
Assets, liabilities, revenues and expenses have<br />
not been offset except when offsetting is required<br />
or permitted by a standard of GRAP.<br />
The financial statements incorporate the principle<br />
accounting policies set out below, which are<br />
consistent with those adopted in the previous year.<br />
The details of any changes in accounting policies<br />
are explained in the relevant policy.<br />
51 MUNICIPAL DEMARCATION BOARD - Annual Report 2012<br />
B. STANDARDS AND INTERPRETATIONS ISSUED,<br />
BUT NOT YET EFFECTIVE<br />
The MDB has not applied the following standards<br />
and interpretations, which have been published<br />
and are mandatory for the <strong>Board</strong>’s accounting periods<br />
beginning on or after 1 April 2012.<br />
Standards of GRAP effective for financial period<br />
commencing on or after 1 April 2012<br />
GRAP 21 - Impairment of Non-cash-generating<br />
Assets<br />
ASB Issue date: March 2009<br />
Effective date: For years beginning on or after<br />
1 April 2012<br />
The entity expects to adopt the standard for the<br />
first time in the 2012 annual financial statements.<br />
New standard of GRAP: Prescribes the procedures<br />
that an entity applies to determine whether<br />
a non-cash-generating asset is impaired and to<br />
ensure that impairment losses are recognised.<br />
The standard also specifies when an entity would<br />
reverse an impairment loss and prescribes disclosures.<br />
The impact of implementing this standard<br />
is expected to be immaterial in the context of this<br />
entity’s operations.<br />
GRAP 23 - Revenue from Non-exchange Transactions<br />
(Taxes and Transfers)<br />
ASB Issue date: February 2008<br />
Effective date: For years beginning on or after<br />
1 April 2012<br />
The entity expects to adopt the standard for the<br />
first time in the 2012 annual financial statements.<br />
New standard of GRAP: Prescribes requirements<br />
for the financial reporting of revenue arising<br />
from non-exchange transactions, other than<br />
non-exchange transactions that give rise to an<br />
entity combination. The standard deals with issues<br />
that need to be considered in recognising<br />
and measuring revenue from non-exchange<br />
transactions, including the identification of contributions<br />
from owners. The impact of implementing<br />
this standard is expected to be immaterial in<br />
the context of this entity’s operations.
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