HDA Annual Report

ANNUAL REPORT 2023/24

Accounting Policies and municipalities are not classified as assets in the accounting records of the HDA due to the relationship between the Agency and its clients, the Land is disclosed as a note to the financial statements as per requirement of GRAP 109. Special consideration is given to the classification of an agreement (once the standard is triggered) to carefully consider whether the HDA is an agent. The HDA is an agent when, in relation to transactions with third parties, all three of the following criteria are present: It does not have the power to determine the significant terms and conditions of the transaction. It does not have the ability to use all, or substantially all, of the resources that result from the transaction for its own benefit. It is not exposed to variability in the results of the transaction. - - - Principal-agent arrangements are governed by a binding arrangement. The 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. Substance over form is applied. The requirements of these binding arrangements, particularly the rights and obligations established for the various parties, inform the HDA ‘s assessment of whether it undertakes transactions for its own benefit, or for the benefit of another entity. The terms and conditions of the binding arrangement are assessed to determine the roles, responsibilities and authority of parties in relation to the activities and resulting transactions undertaken in terms of that arrangement. Identification Binding arrangement

of the revenue and expenses it receives or incurs in executing the transactions on behalf of the principal in accordance with the requirements of the relevant Standards of GRAP. The HDA recognises assets and liabilities arising from principal agent arrangements in accordance with the requirements of the relevant Standards of GRAP. The HDA operates in an economic environment currently dominated by entities directly or indirectly owned by the South African government. As a result of the constitutional independence of all three spheres of government in South Africa, only parties within the national sphere of government will be considered to be related parties. Transactions disclosed are those occurred with parties not at arms length and not normal commercial terms. Key management is defined as being individuals with the authority and responsibility for planning, directing and controlling the activities of the entity. All individuals from the level of Executive Committee up to the Accounting Authority are regarded as key management. Close members of the family of persons related to the entity may influence, or be influenced by them in their transactions with the entity. 15. Related parties

16. Finance costs

Finance costs are charges incurred by the HDA in connection with finance lease liabilities, and are recognised as an expense in a period which they are incurred.

17. Financial instruments

A Financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or residual interest of another entity.

Recognition

Initial recognition

The HDA, as an agent, recognises only that portion

The entity recognises a financial asset or a financial

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