BANKSETA AR 31 AUGUST

ANNUAL FINANCIAL STATEMENTS ACCOUNTING POLICIES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2022

6 . EXPENDITURE - GRANTS AND PROJECT EXPENDITURE AND ADMINISTRATION EXPENDITURE (CONTINUED)

6.3 Administration expenditure The Skills Development Levies Act (Act No. 9 of 1999, as amended) stipulates that a maximum of 10% of the levy income for the sector may be used for the SETA’s operational administration expenses. An additional maximum of 0.5% of the sector levy income is contributed by the SETA to the Quality Council for Trade and occupations (QCTO) to fund the QCTO’s activities. The Minister determines the annual QCTO contribution. In exceptional circumstances and on application by the SETA, the Minister may approve that the SETA exceed the 10.5% administration expense limit. In cases where the SETA has exceeded this administration expense limit without prior approval, the SETA may apply to the Minister for condonation.

7.

PROPERTY AND EQUIPMENT Property and equipment comprise tangible non-current assets that are held for use for administrative purposes and are expected to be used during more than one financial year.

The cost of an item of property and equipment is recognised as an asset when: - it is probable that future economic benefits or service potential associated with the item will flow to the SETA; and - the cost or fair value of the item can be measured reliably. The cost of an item of property and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.

Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at the date of acquisition.

Property and equipment is initially recognised at cost and subsequently at cost less any subsequent accumulated depreciation and adjusted for any impairments. Depreciation 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, residual values and depreciation method each year, with the effect of any changes in estimate accounted for on a prospective basis.

The useful life, residual value and depreciation method is assessed at each reporting date for appropriateness.

The following useful lives are used in the calculation of depreciation. - Computer equipment 3 to 12 years - Office furniture and fittings 10 to 21 years - Office equipment 5 to 15 years - Leasehold improvements over the lease term

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PART E: FINANCIAL INFORMATION | BANKSETA ANNUAL REPORT 2021/22