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HSRC Annual Report 2016/17
challenges), negotiations are promptly held with the funder where additional funding is requested. Revenue is recognised
for work in progress in instances where the probability of additional funding has been assessed as highly probable by
the Executive Director of the research programme in which the project is being executed.
The HSRC has several funders that normally process payments for research-related activities prior to the actual research
commencing. Upon receipt, a liability is raised (income received in advance), and reduced as and when costs are incurred
on the respective project.
1.4.1.2. Other operating revenue
Revenue from the sale of goods is recognised when significant risks and rewards of ownership of goods are transferred
to the buyer. Sale of goods incorporates sale of publications, sale of food and letting of parking space in the HSRC-
owned building situated in Pretoria. Revenue from royalties is recognised on the accrual basis in accordance with the
substance of the relevant agreement. Rental income is recognised as revenue on a straight-line basis over the lease term.
1.4.1.3. Interest income
Revenue is recognised as interest accrued using the effective interest rate, and is included in other revenue in the
Statement of Financial Performance.
1.4.2. Revenue from non-exchange transactions
Revenue from non-exchange transaction arises when the entity receives value from another entity or government
department, without directly giving approximately equal value in exchange.
Revenue from non-exchange transactions is generally recognised to the extent that the related receipt or receivable
qualifies for recognition as an asset and there is no liability to repay the amount. The following is classified as revenue
from non-exchange transactions.
1.4.2.1. Parliamentary grants
Revenue from parliamentary grants is measured at the amount of the Medium-Term Expenditure Framework (MTEF)
allocation received by the entity. The grant received or receivable is recognised when the resources that have been
transferred meet the criteria for recognition as revenue and there is not a corresponding liability in respect of related
conditions. Where such conditions associated with the grant have not been met, a liability is recognised.
1.4.2.2. Other non-exchange revenue resulting in recognition of assets
Assets and revenue arising from transfer transactions are recognised in the period in which the transfer arrangement
becomes binding. Where a transfer is subject to conditions that, if unfulfilled, require the return of the transferred
resources, the entity recognises a liability until the condition is fulfilled.
1.5. Taxes
The HSRC is exempt from income tax in terms of section 10(1) (a) of the Income Tax Act (Act No. 58 of 1962).
1.6. Property, plant and equipment
1.6.1. Initial recognition of cost
Property, plant and equipment (other than land and buildings and artwork) are measured at cost, net of accumulated
depreciation and/or accumulated impairment losses, if any.
The cost of an item of property, plant and equipment is recognised as an asset when:
•
It is probable that future economic benefits associated with the item will flow to the entity; and
•
The cost of the item can be measured reliably.