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HSRC Annual Report 2016/17
1.6.2.3. Equipment, motor vehicles and artwork
The useful lives of the various categories of equipment have been assessed to be:
Office furniture
22 years
Motor vehicles
5 years
Computer and other equipment
5–22 years
Library books and manuscripts
20 years
Artwork
25 years
Mobile clinics
Estimated kilometres
1.6.2.4. Leasehold assets
Leasehold assets are depreciated over the period of the rental agreement.
1.6.2.5. Donor funded assets
All assets that were bought with donor funds are depreciated over the shorter of the asset’s useful life or project duration.
1.6.3.
De-recognition of assets
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Financial
Performance in the year the asset is derecognised.
1.6.4. Key estimates and assumptions applied by management
1.6.4.1. Property, plant and equipment and intangible assets
Property, plant and equipment and intangible assets are depreciated over their useful lives, taking into account residual
values, where appropriate. The actual lives of the assets and residual values are assessed annually andmay vary depending
on a number of factors. In re-assessing asset lives, factors such as technological innovation andmaintenance programmes
are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life
of the asset and projected disposal values. HSRC reassessed assets useful lives as at 31 March 2017, with depreciation
decreasing by R1.1 million annually in future financial years.
1.6.4.2. Revaluation of property, plant and equipment
HSRCmeasures its land and buildings at revalued amounts with changes in fair value being recognised in the Statement
of Changes in Net Assets. The entity engaged independent valuation specialists to determine fair value on 1 November
2014, thereby impacting depreciation for the 2016/17 financial year. The key assumptions used to determine the fair
value of the land and buildings are further explained in Note 6.1 and 6.2.
1.7. Intangible assets
1.7.1. Initial recognition
Intangible assets that meet the recognition criteria are stated in the Statement of Financial Position at amortised cost,
being the initial cost price less any accumulated amortisation and impairment losses.
An intangible asset is recognised when:
•
It is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and
•
The cost of the asset can be measured reliably.
Intangible assets are initially recognised at cost. Expenditure on research (or on the research phase of an internal project)
is recognised as an expense when it is incurred.