Mr LJ Mahlangu - Municipal Demarcation Board

amount. An impairment loss is recognised as an
expense immediately.
Where an impairment loss subsequently reverses,
the carrying amount of an asset is increased to the
revised estimate of its recoverable amount, but so
that the increased carrying amount does not exceed
the carrying amount that would have been determined
had no impairment loss been recognised
for the asset in prior years. A reversal of an impairment
loss is recognized as income immediately.
P. COMPARATIVE FIGURES
When the presentation or classification of items
in the Annual Financial Statements is amended,
prior period comparative amounts are reclassified.
The nature and reasons for the reclassification are
disclosed.
Q. RELATED PARTIES
Parties are considered to be related if one party has
the ability to control the other party or exercise significant
influence over the other party in making financial
and operating decisions or if the related party entity
and another party are subject to common control.
Related parties include individuals who have significant
influence over the Board, such as members of
the Board and key management personnel. Only
transactions between the Board and related parties
during the reporting period not at arm’s length or not
in the ordinary course of business as well as comparative
information are disclosed in the notes to the
annual financial statements.
R. SHORT-TERM EMPLOYEE BENEFITS
The cost of short-term employee benefits (those
payable within 12 months after service is rendered)
such as, salaries, wages, social security
contributions, leave pay and bonuses are recognised
in the period in which the service is rendered
and is not discounted. The expected cost of shortterm
accumulating compensated absences is recognised
as an expense as the employees render
services that increases their entitlement or, in the
59 MUNICIPAL DEMARCATION BOARD - Annual Report 2012
case of non-accumulating absences, when the absences
occur.
The expected cost of performance bonus payments
is recognised as an expense when there
is a legal or constructive obligation to make such
payments as a result of past performance.
Accruals for leave pay and performance bonuses
are recognised as a liability in the financial statements,
after deducting any amount already paid.
S. CONTINGENCIES AND PROVISIONS
Contingent liabilities are disclosed when the Board
has a possible obligation that arose from past
events whose existence will be confirmed only by
the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Board.
Contingent assets and contingent liabilities are not
recognised. Contingencies are disclosed in the
note. The note should be either an assets or liability,
depending on the situation.
Provisions are recognised when the Board has a
present obligation as a result of a past event; it
is probable that an outflow of resources embodying
economic benefits or service potential will be
required to settle the obligation; and a reliable estimate
can be made of the obligation.
Provisions are reviewed at each reporting date
and adjusted to reflect the current best estimate.
Provisions are reversed if it is no longer probable
that an outflow of resources embodying economic
benefits or service potential will be required, to settle
the obligation.
T. NON-CURRENT ASSETS HELD FOR SALE AND
DISPOSAL GROUPS
Non-current assets and disposal groups are classified
as held for sale if their carrying amount will
be recovered principally through a sale transaction
rather than through continuing use. This condition