CCMA ANNUAL REPORT

Commission for Conciliation, Mediation and Arbitration Annual Report 2022/23

Financial Statement for the year ended 31 March 2023

Accounting Policies

1.12 Impairment of cash-generating assets Cash-generating assets are assets used with the objective of generating a commercial return. Commercial return means that positive cash flows are expected to be significantly higher than the cost of the asset. Impairment is a loss in the future economic benefits or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation (amortisation). Carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated depreciation and accumulated impairment losses thereon. A cash-generating unit is the smallest identifiable group of assets used with the objective of generating a commercial return that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets. Designation At initial recognition, the CCMA designates an asset as non-cash-generating, or an asset or cash-generating unit as cash generating. The designation is made on the basis of an CCMA’s objective of using the asset. The CCMA designates an asset or a cash-generating unit as cash-generating when: • its objective is to use the asset or a cash-generating unit in a manner that generates a commercial return; such that • the asset or cash-generating unit will generate positive cash flows, from continuing use and its ultimate disposal, that are expected to be significantly higher than the cost of the asset. An asset used with the objective of generating a commercial return and service delivery, is designated either as a cash generating asset or non-cash-generating asset based on whether the CCMA expects to use that asset to generate a commercial return. When it is not clear whether the objective is to use the asset to generate commercial return, the CCMA designates the asset as a non-cash-generating asset and applies the accounting policy on impairment of non-cash generating assets, rather than this accounting policy. Identification When the carrying amount of a cash-generating asset exceeds its recoverable amount, it is impaired. The CCMA assesses at each reporting date whether there is any indication that a cash-generating asset may be impaired. If any such indication exists, the CCMA estimates the recoverable amount of the asset. Irrespective of whether there is any indication of impairment, the CCMA also tests a cash-generating intangible asset with an indefinite useful life or a cash-generating intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed at the same time every year. If an intangible asset was initially recognised during the current reporting period, that intangible asset was tested for impairment before the end of the current reporting period. Value in use Value in use of a cash-generating asset is the present value of the estimated future cash flows expected to be derived from the continuing use of an asset and from its disposal at the end of its useful life.

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