BANKSETA AR 31 AUGUST

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

8.

INTANGIBLE ASSETS Intangible assets are identifiable non-monetary assets without physical substance and mainly comprise of software licenses and computer application licenses.

An intangible asset is recognised when: - 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 following useful lives are used in the calculation of amortisation: Software, application software and licenses

2 years (unless the license period differs)

Where the carrying amount of an asset is greater than its estimated recoverable service amount, it is written down immediately to its recoverable service amount (i.e. impairment losses are recognised.)

BANKSETA derecognises intangible assets when it disposes of the assets or alternatively does not consume economic benefit or service potential from those assets.

The gain or loss on disposal of intangible asset is determined as the difference between the sale proceeds and the carrying amount and are taken into account in determining the net surplus or deficit for the year.

8.1 Impairment of intangible assets Remaining useful lives are reviewed annually at each year end in accordance with the indicator based approach and adjusted as needed. The estimated remaining useful lives take into account the state of the asset and the current usage of the assets. Assets are assessed for impairment indicators on an annual basis. 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 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 the non-cash generating asset’s fair value less costs to sell and its value in use. 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 amortised replacement method. 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 amortisation is recognised immediately in surplus or deficit in the Statement of Financial Performance.

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