RTIA Annual Report E-Book

Road Traffic Infringement Agency Annual Financial Statements for the year ended 31 March 2024 __________________________________________________________________________________________________________________________________________________________ Significant Accounting Policies

Government grants are recognised as income in the period in which they are received or deferred when conditions for the grant are not met. A government grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Agency with no future related costs is recognised as income in the period in which it becomes receivable. RTIA does not receive conditional grants in terms of the vote received from the Department of Transport except where there is a national key program that the public entity is required to deliver upon on behalf of the Minister of Transport. Such a grant will be appropriated according through the Act of Parliament by the Minister of Finance and National Treasury will make a provision for such in their budget vote allocation to the DOT. Stipulations are enforceable through administrative processes. Stipulations can either be in the form of conditions or in the form of restrictions. For conditions, a recipient may be required to use the transferred asset for a particular purpose. However, a condition has an additional requirement which states that the asset or its future economic benefits or service potential should be returned to the transferor should the recipient not use the asset for the particular purpose stipulated. A condition imposes on the recipient a performance obligation, this performance obligation should be a consequence of the condition itself. Performance obligations requires the recipient to consume the future economic benefits or service potential embedded in the transferred asset as specified, or return the asset or other future

economic benefits or service potential to the transferor Non refundable transactions When services are being delivered over a period of time and the agreement includes a clause stipulating that the fee payable is non-refundable, the entity should defer the revenue to be recognised, therefore the revenue will be recognised based on a percentage of completion basis (or other method as appropriate). The revenue should be recognised in surplus and deficit as the service is provided. Unclaimed liabilities Liabilities that are unclaimed for a period of 5 years are written off and recognised as revenue. 1.13 Accumulated surplus/deficit The accumulated surplus/deficit represents the net difference between the total assets and the total liabilities of the RTIA. Any surplus or deficit realised during a specific financial year are credited/debited against accumulated surplus/deficit. Prior year adjustments, relating to income and expenditure, are credited/ debited against accumulated surplus/deficit when retrospective adjustments are made. 1.14 Interest Revenue arising from the use by others of entity assets yielding interest, royalties and dividends or similar distributions is recognised when:

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Road Traffic Infringement Agency • Annual Report 2023/24