HSRC Integrated Annual Report 2018/2019

HSRC INTEGRATED ANNUAL REPORT 2018/19 / 101 1.17 Pre-payments and Advances Payments made in advance to suppliers are in respect of goods and services in line with the business of the entity. An item will be recognised as a pre-payment if the payment was made in advance and at the reporting period these goods and services had not been delivered or rendered to the entity. Pre-payments and advances will be derecognised as and when goods and services are received. There is no contractual right to receive a refund in cash or another financial instrument from the suppliers. 1.18 Irregular and Fruitless and Wasteful Expenditure Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation. When confirmed, irregular expenditure must be recorded in the notes to the financial statements. The amount to be recorded in the notes must be equal to the value of the irregular expenditure incurred unless it is impracticable to determine the value thereof. Where such impracticality exists, the reasons therefore must be provided in the notes. Irregular expenditure must be removed from the notes when it is either (a) condoned by the National Treasury or the relevant authority; (b) it is transferred to receivables for recovery; or (c) it is not condoned and is irrecoverable. A receivable related to irregular expenditure is measured at the amount that is expected to be recovered and must be de-recognised when the receivable is settled or subsequently written off as irrecoverable. Fruitless and wasteful expenditure means expenditure that was made in vain and would have been avoided had reasonable care been exercised. All irregular, fruitless and wasteful expenditure is recognised against the specific class of expense to which it relates and disclosed in a note to the financial statements when it has been identified. If the expenditure is recoverable, an asset is recognised until it’s recovered from the person responsible or written off as irrecoverable in the statement of financial performance. 1.19 Standards Issued and not yet Effective At the date of authorisation of these financial statements, the following accounting standards of Generally Recognised Accounting Practice (GRAP) were in issue, but not yet effective: • GRAP 34 – Separate financial statements • GRAP 35 – Consolidated Financial Statements • GRAP 36 – Investments in Associates and Joint Ventures • GRAP 37 – Joint arrangements • GRAP 38 – Disclosure of Interests in Other Entities • GRAP 104 – Financial instruments • GRAP 110 – Living and Non Living Resources Management believes that the adoption of these standards in future periods will have no material impact on the financial statements when they are adopted as these Standards have been used to formulate and inform the current accounting policies and disclosures where applicable to the HSRC. Application of all of the above GRAP standards will be effective from a date to be announced by the Minister of Finance. This date is not currently available. 1.16 Segment Reporting Information The HSRC manages the operations as a combined operations with the Board and CEO making key financial decisions based on the combined operations. Resources allocation, assets and liabilities are also managed on a combined basis and as such the organisation has a single reporting entity. Geographical information is also not provided as there are no distinct economic benefits attached to the respective regional offices, with research projects undertaken in all different parts of the country. 1.17 Events after the Reporting Date Subsequent events, which are either favourable or unfavourable, occurring between the reporting date and the financial statements authorisation date, are included in the notes to the financial statements. ACCOUNTING POLICIES for the period ended 31 March 2019 (continued)