BANKSETA ANNUAL REPORT 2023

ANNUAL FINANCIAL STATEMENTS ACCOUNTING POLICIES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2023 7. PROPERTY AND EQUIPMENT (continued) 7.1 Impairment of assets The BANKSETA assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, BANKSETA estimates the recoverable service amount of the asset. If there is any indication that an asset may be impaired, the recoverable service amount is estimated for the individual asset. The recoverable service amount is the higher of a non-cash generating asset’s fair value less costs to sell and its value in use. Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable and willing parties, less cost of disposal. If the recoverable service amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. The reduction is an impairment cost. An impairment loss of assets carried at cost less any accumulated depreciation is recognised immediately in surplus or deficit in the statement of financial performance. The BANKSETA assesses at each reporting date whether there is any indication that an impairment loss recognised in prior years for assets still exists or may have decreased. If any such indication exists, the recoverable service amounts of those assets are estimated. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss of assets carried at cost less accumulated depreciation is recognised immediately in the statement of financial performance. 8. INTANGIBLE ASSETS Intangible assets are identifiable non-monetary assets without physical substance and mainly comprise of software licences and computer application licences. - It is probable that the expected future economic benefits or service potential that are attributable to the asset will flow to the SETA; and - The cost or fair value can be measured reliably. Intangible assets are initially recognised at cost and subsequently at cost less any subsequent accumulated amortisation and adjusted for any impairments. Amortisation is charged so as to write off the cost of assets over their estimated useful lives, using the straight line method. The useful life indicators are used to review estimated useful lives and amortisation method each year, with the effect of any changes in estimate accounted for on a prospective basis. The value in use for a non-cash generating asset is the present value of the asset’s remaining service potential. The calculation method applied is depreciated replacement method. An intangible asset is recognised when:

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BANKSETA ANNUAL REPORT 2022/23