HDA Annual Report

ANNUAL REPORT 2023/24

Accounting Policies of its annual financial statements, is appropriate. These annual financial statements have been prepared based on the expectation that the entity will continue to operate as going concern for at least the next 12 months.

be measured reliably the service in kind is not recognised.

Where services in-kind are not significant to the agency’s operations and/or service delivery objectives and/or do not satisfy the criteria for recognition, and the fair value of the assets cannot be measured the agency discloses the nature and type of services in-kind received during the reporting period. The amount of each segment item reported is the measure reported to management for the purposes of making decisions about allocating resources to the segment and assessing its performance. Adjustments and eliminations made in preparing the entity’s financial statements and allocations of revenues and expenses are included in determining reported segment surplus or deficit only if they are included in the measure of the segment’s surplus or deficit that is used by management. 1.9 Segment Reporting

1.5

Impairment property, plant and equipment

During the annual physical verification of assets, management assesses each asset and make judgement of the condition of each asset. Conditional assessment reports are used to assess whether there are indications of impairment of an item of PPE. When indications exist, the calculation in respect of the impairment of property, plant and equipment is based on an assessment of the extent to which the recoverable amount of the asset has declined below the carrying amount. This was performed across all classes of property, plant and equipment.

1.6 Budget information

A difference of 10% or more between budget and actual amounts is regarded as material. All material differences are explained in the notes to the annual financial statements.

1.10 Principal-Agent relationships

HDA assesses whether it is an agent or a principal by assessing the rights and obligations of the various parties established in the binding arrangement.

1.7 Operating lease commitments - Agency as lessor or lessee

Leases where risks and rewards of ownership are not transferred to the lessee are classified as operating leases. Payments received or paid under operating leases are recognised in statement of financial performance on a straight-line basis over the period of the lease.

1.8 Services in-kind

Except for financial guarantee contracts, the agency recognises services in-kind that are significant to its operations and/or service delivery objectives as assets and recognise the related revenue when it is probable that the future economic benefits or service potential will flow to the Municipality and the fair value of the assets can be measured reliably. Where the fair value of the assets cannot

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