4.7 Inventory Inventories that qualify for recognition must be initially reflected at cost. Where inventories are acquired at no cost, or for nominal consideration, their cost shall be their fair value at the date of acquisition. All inventory items at year-end are reflected using the weighted average cost or FIFO cost formula. 4.8 Capital assets 4.8.1
Movable assets Initial recognition A capital asset is recorded in the asset register on receipt of the item at cost. Cost of an asset is defined as the total cost of acquisition. Where the cost cannot be determined accurately, the movable capital asset is stated at fair value. Where fair value cannot be determined, the capital asset is included in the asset register at R1.
SECTION FOUR | ANNUAL FINANCIAL STATEMENTS
DEPARTMENT OF LABOUR | VOTE 18 | ACCOUNTING POLICIES | for the year ended 31 March 2012
All assets acquired prior to 1 April 2002 are included in the register R1. Subsequent recognition Subsequent expenditure of a capital nature is recorded in the Statement of Financial Performance as “expenditure for capital assets” and is capitalised in the asset register of the Department on completion of the project. Repairs and maintenance is expensed as current “goods and services” in the Statement of Financial Performance. 4.8.2
Immovable assets Initial recognition A capital asset is recorded on receipt of the item at cost. Cost of an asset is defined as the total cost of acquisition. Where the cost cannot be determined accurately, the immovable capital asset is stated at R1 unless the fair value for the asset has been reliably estimated.
[119]
Subsequent recognition Work-in-progress of a capital nature is recorded in the Statement of Financial Performance as “expenditure for capital assets”. On completion, the total cost of the project is included in the asset register of the Department that is accountable for the asset.
4.8.3
Intangible assets Initial recognition An intangible asset is recorded in the asset register on receipt of the item at cost. Cost of an intangible asset is defined as the total cost of acquisition. Where the cost cannot be determined accurately, the intangible asset is stated at fair value. Where fair value cannot be determined, the intangible asset is included in the asset register at R1. All intangible assets acquired prior to 1 April 2002 can be included in the asset register at R1.* Subsequent expenditure Subsequent expenditure of a capital nature is recorded in the Statement of Financial Performance as “expenditure for capital asset” and is capitalised in the asset register of the Department. Maintenance is expensed as current “goods and services” in the Statement of Financial Performance.
Annual Report of the Department of Labour | 1 April 2011 - 31 March 2012
Repairs and maintenance is expensed as current “goods and services” in the Statement of Financial Performance.