140945 Limpopo Gambling Board AR DRAFT 7

LIMPOPO GAMBLING BOARD Annual Financial Statements for the year ended 31 March 2022 Accounting Policies 1.15 Revenue from non-exchange transactions (continued) Measurement

Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the entity. When, as a result of a non-exchange transaction, the entity 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. Transfers Apart from Services in kind, which are not recognised, the entity recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset. The entity recognises an asset in respect of transfers when the transferred resources meet the definition of an asset and satisfy the criteria for recognition as an asset. Transferred assets are measured at their fair value as at the date of acquisition. Government grant The entity receives a grant from government through the shareholder each financial year. The grant is recognised as a receivable at the beginning of each financial year and recognised into revenue as monthly transferes are made by the shareholder to the entity. The receivable is only recognised when: It is probable that the future economic benefits or service potential associated with the asset will flow to the entity and that the fairvalue of the asset can be measured reliably. 1.16 Accumulated Surplus In terms of Section 53(3) of Public Finance Management Act a public entity which must submit a budget in terms of subsection (1) may not budget for a deficit and may not accumulate surpluses unless the prior written approval has been obtained from the National Treasury. Pursuant to this provision, surpluses at each reporting date are surrendered unless retention has been authorised. Funds generated by the entity are surrendered as per Instruction Note 2 of 2013. 1.17 Accounting by principals and agents Identification An agent is an entity that has been directed by another entity (a principal), through a binding arrangement, to undertake transactions with third parties on behalf of the principal and for the benefit of the principal. A principal is an entity that directs another entity (an agent), through a binding arrangement, to undertake transactions with third parties on its behalf and for its own benefit. A principal-agent arrangement results from a binding arrangement in which one entity (an agent), undertakes transactions with third parties on behalf, and for the benefit of, another entity (the principal).

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