Mr LJ Mahlangu - Municipal Demarcation Board

Measurement
Revenue from a non-exchange transaction is
measured at the amount of the increase in net assets
recognised by the entity.
Conditional grants
Revenue received from grants are recognised as
income when the entity complies with the conditions
of the grant.
The revenue is deferred and recognised as a liability
to the extent that the conditions of the grant
have not been met.
G. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are tangible noncurrent
assets that are held for use in the production
or supply of goods or services, rental to others,
or for administrative purposes, and are expected
to be used during more than one period.
The cost of an item of property, plant and equipment
is the purchase price and other costs attributable
to bring the asset to the location and condition
necessary for it to be capable of operating in
the manner intended by management. Trade discounts
and rebates are deducted in arriving at the
cost. The cost, if any, also includes the necessary
costs of dismantling and removing the assets and
restoring the site on which it is located.
Initial Recognition
The cost of an item of property, plant and equipment
is recognised as an asset when:
(i) It is probable that the future economic benefits
or service potential associated with the item
will flow to the entity; and
(ii) The cost of the item can be measured reliably.
Subsequent Measurement
Property, plant and equipment are initially recognised
as assets on acquisition date and are initially
recorded at cost. Where an asset is acquired at no
cost, or for a nominal cost, its cost is measured at
its fair value as at the date of acquisition. Property,
plant and equipment are subsequently measured
at historical cost less accumulated depreciation
and accumulated impairment losses.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset,
as appropriate, only when it is probable that future
economic benefits or service potential associated
with the item will flow to the Board and the cost of
the item can be measured reliably. All other repairs
and maintenance are charged to the statement
of financial performance during the financial
period in which they are incurred.
Depreciation
Subsequent to initial measurement property, plant
and equipment are depreciated on a straight line
basis over their estimated useful lives to their estimated
residual values. The useful lives of property
plant and equipment are as follows:
Office equipment 5 - 12 years
Motor vehicles 5 - 8 years
Computer equipment 3 - 9 years
Furniture and fittings 10 -15 years
Leasehold improvement 5 years
When there is no reasonable certainty that the lessee
will obtain ownership by the end of the lease
term, the asset is fully depreciated over the shorter
of the lease term and its useful life.
At each reporting date, the residual values and
useful lives of all property, plant and equipment
are reviewed and adjusted if necessary.
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.
De-recognition
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable
amount.
MUNICIPAL DEMARCATION BOARD - Annual Report 2012 54