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HSRC Annual Report 2016/17
PART E: Annual Financial Statements
Accounting
Policies
for the year ended 31 March 2017
1. Policies applied during the financial period under review
1.1. Basis of preparation
The Annual Financial Statements have been prepared using the accrual basis of accounting, in terms of which items
are recognised as assets, liabilities, net assets (reserves), revenue and expenses when they satisfy the definitions and
recognition criteria for those elements, which in all material aspects are consistent with those applied in the previous
years, except where a change in accounting policy has been recorded.
The Financial Statements are prepared in South African Rand (R), and all values are rounded to the nearest thousand
(R’000), except where otherwise indicated. The South African Rand is also the organisation’s functional currency.
The Annual Financial Statements have been prepared in accordance with the effective Standards of Generally Recognised
Accounting Practice (GRAP), including any interpretations and directives issued by the Accounting Standards Board (ASB).
1.2. Going-concern assumption
The Annual Financial Statements have been prepared on a going-concern basis.
1.3. Offsetting
Assets, liabilities, revenues and expenses have not been offset, except when offsetting is required or permitted by a
Standard of GRAP.
1.4. Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the HSRC and revenue
can be reliably measured. Revenue is measured at fair value of the consideration receivable on an accrual basis.
1.4.1. Revenue from exchange transactions
Revenue from exchange transactions refers to revenue that accrues to the entity directly in return for services rendered
or goods sold, the value of which approximates the consideration received or receivable, excluding indirect taxes, rebates
and discounts. The following specific recognition criteria must be met before revenue is recognised:
1.4.1.1. Research revenue
Revenue that resulted from the rendering of research and related services is recognised using the stage of completion,
determined according to the percentage of costs incurred to date in relation to the total estimated cost of the project.
The HSRC is not a profit-making organisation and as such, all projects are budgeted with no surplus anticipated to
be earned at the end of each project. In instances where possible deficits are anticipated (due to project execution