Page 197 - DSD ANNUAL REPORT 2022-2

PART E: FINANCIAL INFORMATION

Notes of the Annual Financial Statements for the year ended 31 March 2022

8.2 Other expenditure
Other expenditure (such as goods and services, transfers and subsidies and payments for capital assets) is recognised in
the statement of financial performance on the date of payment. The expense is classified as a capital expense if the total
consideration paid is more than the capitalisation threshold.
8.3 Accruals and payables not recognised
Accruals and payables not recognised are recorded in the notes to the financial statements at cost at the reporting date.
8.4 Leases
8.4.1 Operating leases
Operating lease payments made during the reporting period are recognised as current expenditure in the statement of financial
performance on the date of payment. Operating lease payments received are recognised as Departmental revenue.
The operating lease commitments are recorded in the notes to the financial statements.
8.4.2 Finance leases
Finance lease payments made during the reporting period are recognised as capital expenditure in the statement of financial
performance on the date of payment. Finance lease payments received are recognised as Departmental revenue.
The finance lease commitments are recorded in the notes to the financial statements and are not apportioned between the
capital and interest portions.
Finance lease assets acquired at the end of the lease term are recorded and measured at the lower of:
Cost, being the fair value of the asset; or
The sum of the minimum lease payments made, including any payments made to acquire ownership at the end of the lease
term, excluding interest.
9 Aid Assistance
9.1 Aid assistance received
Aid assistance received in cash is recognised in the statement of financial performance when received. In-kind aid assistance is
recorded in the notes to the financial statements on the date of receipt and is measured at fair value.
Aid assistance not spent for the intended purpose and any unutilised funds from aid assistance that are required to be refunded
to the donors are recognised as payable in the statement of financial position.
9.2 Aid assistance paid
Aid assistance paid is recognised in the statement of financial performance on the date of payment. Aid assistance payments
made prior to the receipt of funds are recognised as receivable in the statement of financial position.
10 Cash and cash equivalents
Cash and cash equivalents are stated at a cost in the statement of financial position.
Bank overdrafts are shown separately on the face of the statement of financial position as a current liability.
For the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held, other short-term highly liquid
investments and bank overdrafts.
11 Pre-payments and advances
Pre-payments and advances are recognised in the Statement of Financial Position when the Department receives or disburses
the cash.
Pre-payments and advances are initially and subsequently measured at cost.
Pre-payments for goods and services are expensed as the supplier implements agreed-on activities and provide a satisfactory
progress report on performance and utilisation of disbursed funds in line with the signed service level agreement.
The Department is transferring funds (advances) to the Government Communication Information System (GCIS) and the
Department of International Relations and Cooperation in respect of accommodation for trips abroad.

These advances are expensed once the respective departments paid the accounts on behalf of the Department and provide the
necessary source documents to the Department.
12 Loans and receivables
Loans and receivables are recognised in the statement of financial position at cost plus accrued interest, where interest is
charged, less amounts already settled or written off. Write-offs are made according to the Department’s write-off policy.
With regard to Social Assistance debtors, write-offs are made according to the Policy on Management of Social Assistance
debtors as administered by the South African Social Security Agency.
13 Investments
Investments are recognised in the statement of financial position at cost.
14 Financial assets
14.1 Financial assets (not covered elsewhere)
A financial asset is recognised initially at its cost-plus transaction costs that are directly attributable to the acquisition or issue
of the financial asset.
At the reporting date, a department shall measure its financial assets at cost, less amounts already settled or written-off, except
for recognised loans and receivables, which are measured at cost plus accrued interest, where interest is charged, less amounts
already settled or written-off.
14.2 Impairment of financial assets
Where there is an indication of impairment of a financial asset, an estimation of the reduction in the recorded carrying value, to
reflect the best estimate of the amount of the future economic benefits expected to be received from that asset, is recorded in
the notes to the financial statements.

DEPARTMENT OF SOCIAL DEVELOPMENT ANNUAL REPORT 2021/22 197