HDA Annual Report

ANNUAL REPORT 2023/24

Accounting Policies The HDA is financed from money appropriated by Parliament and other sources as indicated below:

revenue can be reliably measured.

Interest income is recognised as it accrues on a time apportionment basis taking into account its effective yield.

2.1 Revenue from exchange transactions

Revenue from exchange transactions refers to the revenue that accrued to the HDA directly in return for services rendered, the value of which approximates the consideration received or receivable. Revenue is recognised based on cost recovery. Revenue from exchange transactions comprises of, Provinces support conditional grant, Management fees, Interest income, rental income and other income. 2.1.1 Human Settlements Conditional Grant Allocation For Project Management Support and Implementation (HSDG) The HDA receives conditional grant funding from provinces in terms of signed MTOP agreements. The conditional grants are treated as liabilities in the statement of financial position in the year it was received or accrued and released to revenue as the expenses are incurred or to the extent that the conditions are met. Management fees are raised in terms of funding agreements and implementation protocols entered into with provinces and municipalities for the management and implementation of various capital projects Management fees are recognised by reference to the stage of completion of projects which is reliably estimated through expenditure incurred at each stage of capital projects. 2.1.2 Management fees

2.1.4 Other income

Other income comprises of insurance claims and other incidental income. Insurance claims and other incidental income are recognised in the financial period in which the claim was raised when it is probable that the economic benefits associated with the claim will flow to the entity and it can be reliably measured. Rental income from land and properties owned by the HDA is accrued on a straight-line basis over the period of lease agreements, unless another systematic basis is more representative of the time pattern in which a use benefit derived from the leased assets is diminished. The Agency identifies, acquires and holds land on behalf of the clients. To avert the risk of the land invasions, the Agency enters into rental agreements with small businesses in the area to temporarily use part of the land for their business purposes. The nature of businesses include small business ventures. The rental income from these land parcels are recognised in project obligations. The funds are used to fund incidental expenditure to maintain these land parcels. Fund management fees are raised in terms of funding agreements entered with provinces for the management of funds received for the implementation of various capital projects. Fund management fees are recognised by reference to a fixed percentage on expenditure incurred throughout the programme. 2.1.5 Rental income 2.1.6 Fund management fees

2.1.3 Interest Income

Revenue arising from the use by others of entity interest yielding assets is recognised to the extent that it is probable that the economic benefits or service potential will flow to the entity and the

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