Brand-South Africa - Annual report 2015 - 2016

Recognition
An inflow of resources from a non-exchange transaction
recognised as an asset is recognised as revenue, except to
the extent that a liability is also recognised in respect of the
same inflow.
As Brand SA satisfies a present obligation recognised as a
liability in respect of an inflow of resources from a non-exchange
transaction recognised as an asset, it reduces the carrying
amount of the liability recognised and recognises an amount
of revenue equal to that reduction.
Measurement
Revenue from a non-exchange transaction is measured at the
amount of the increase in net assets recognised by Brand SA.
When, as a result of a non-exchange transaction, Brand SA
recognises an asset, it also recognises revenue equivalent to
the amount of the asset measured at its fair value as at the
date of acquisition, unless it is also required to recognise a
liability. Where a liability is required to be recognised it will
be measured as the best estimate of the amount required to
settle the obligation at the reporting date, and the amount of
the increase in net assets, if any, recognised as revenue. When
a liability is subsequently reduced, because the taxable event
occurs or a condition is satisfied, the amount of the reduction
in the liability is recognised as revenue.
1.14 Investment income
Investment income is recognised on a time-proportion basis
using the effective interest method.
1.15 Borrowing costs
Borrowing costs are interest and other expenses incurred by
an entity in connection with the borrowing of funds.
Borrowing costs are recognised as an expense in the period
in which they are incurred.
1.16 Translation of foreign currencies
Foreign currency transactions
A foreign currency transaction is recorded, on initial recognition
in Rand, by applying to the foreign currency amount, the spot
exchange rate between the functional currency and the foreign
currency at the date of the transaction.
At each reporting date:
• foreign currency monetary items are translated using
the closing rate;
• non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction; and
• non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates
at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary
items or on translating monetary items at rates different from
those at which they were translated on initial recognition during
the period or in previous Financial Statements are recognised
in surplus or deficit in the period in which they arise.
When a gain or loss on a non-monetary item is recognised
directly in net assets, any exchange component of that gain
or loss is recognised directly in net assets. When a gain or loss
on a non-monetary item is recognised in surplus or deficit,
any exchange component of that gain or loss is recognised
in surplus or deficit.
Cash flows arising from transactions in a foreign currency are
recorded in Rand by applying to the foreign currency amount
the exchange rate between the Rand and the foreign currency
at the date of the cash flow.
1.17 Fruitless and wasteful expenditure
Fruitless expenditure means expenditure which was made
in vain and would have been avoided had reasonable care
been exercised.
All expenditure relating to fruitless and wasteful expenditure
is recognised as an expense in the statement of Financial
performance in the year that the expenditure was incurred. The
expenditure is classified in accordance with the nature of the
expense, and where recovered, it is subsequently accounted
for as revenue in the statement of Financial performance.
1.18 Irregular expenditure
Irregular expenditure as defined in Section 1 of the PFMA is
expenditure other than unauthorised expenditure, incurred in
contravention of or that is not in accordance with a requirement
of any applicable legislation, including -
(a) this Act; or
(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or
any regulations made in terms of the Act; or
(c) any provincial legislation providing for procurement
procedures in that provincial government.
National Treasury practice note no. 4 of 2008/2009 which was
issued in terms of sections 76(1) to 76(4) of the PFMA requires
the following (effective from 1 April 2008):
Irregular expenditure that was incurred and identified during
the current financial year and which was condoned before year
end and/or before finalisation of the Financial Statements must
also be recorded appropriately in the irregular expenditure
register. In such an instance, no further action is also required
with the exception of updating the note to the Financial
Statements.
Irregular expenditure that was incurred and identified during
the current financial year and for which condonement is
being awaited at year end must be recorded in the irregular
expenditure register. No further action is required with the
exception of updating the note to the Financial Statements.
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