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Income is calculated at the fair value of the consideration received or receivable and represents
the receivables for services provided in the normal course of business, after deduction of value-
added tax.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably,
income shall be recognised only to the extent of the expenses recognised that are recoverable.
Members’ contributions are voluntary and are accountable when the funds are received.
Rental income is calculated on an accrual basis in accordance with the essence of the applicable
agreements recognised. Rental income is recognised on a straight-line basis over the rental period,
even if payments are not made on a straightforward basis, or where payments are structured to
increase in line with inflation.
Interest is recognised in profit or loss using the effective interest rate method.
Dividends are recognised in profit or loss when the organisation’s right to receive payment has been
established, and are shown as other income.
2.4 INVESTMENT PROPERTY
Investment property is land and buildings held to earn rentals or for capital appreciation or both,
rather than for use in the production or supply of goods or services or for administrative purposes,
or for sale in the ordinary course of business.
Investment property is initially measured at cost and subsequently at fair value, with changes in
fair value recognised in profit or loss. If the fair value of investment property cannot be measured
reliably without undue cost or effort, then it is measured at cost less accumulated depreciation and
accumulated impairment.
2.5 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are tangible assets which the organisation holds for its own use or for
rental to others and which are expected to be used for more than one period.
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 follow to the organisation, and the cost of the item
can be measured reliably.
Property, plant and equipment is initially measured at cost.
Cost includes cost incurred initially to acquire or construct an item of property, plant and equipment
and costs incurred subsequently to add to, replace part of or service it. If a replacement cost is
recognised in the carrying amount of an item of property, plant and equipment, the carrying amount
of the replaced part is derecognised.
The initial estimate of the costs of dismantling and removing an asset and restoring the site on which
it is located is also included in the cost of property, plant and equipment when such dismantling,
removal and restoration is obligatory.
Expenditure incurred subsequently for major services, additions to or replacements of parts
of property, plant and equipment are capitalised if it is probable that future economic benefits
associated with the expenditure will flow to the organisation and the cost can be measured reliably.
Day-to-day servicing costs are included in profit or loss in the period in which they are incurred.
Property, plant and equipment is subsequently stated at cost less accumulated depreciation and
any accumulated impairment losses, except for land, which is stated at cost less any accumulated
impairment losses.
FINANC
IAL
STATEMEN
TS
Basi
s of
p
re
parati
on and
sum
mary of significant
acco
unting
pol
icie
s (conti
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)