139 FINANCIAL STATEMENTS Inter-entity transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the group's accounting policies. Investments in Group companies Investments in group companies are recognised initially at the transaction price, including transaction costs except where the asset will subsequently be measured at fair value. Where investments in group companies relate to shares that are publicly traded, or where fair values can be measured reliably without undue cost or effort, these assets are subsequently measured at fair value with the changes in fair value being recognised in profit or loss. Other investments are subsequently measured at cost less impairment. 2.3 SIGNIFICANT JUDGEMENTS AND SOURCES OF ESTIMATION UNCERTAINTY Critical judgements in applying accounting policies In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in future could differ from these estimates which may be material to the annual financial statements. Key sources of estimation uncertainty Useful lives and residual values of property, plant and equipment The group and organisation review the residual values and estimated useful lives of property, plant and equipment when changing circumstances indicate that they may have changed since the most recent reporting date. Various factors are considered by management, such as the historical pattern of usage of similar assets, the price obtained for similar assets that have actually been sold and the extent to which the assets capacity will be utilised in the future. When the estimated useful life of an asset differs from previous estimates the change is applied prospectively in the determination of the depreciation charge. Undue cost or effort The Grain South Africa Board believes that due to the fact that there are no significant stakeholders to the group to whom the fair value of the investment property will benefit, the obtaining annual valuations for each property, would result in excessive costs (through valuer's fees) in comparison to the benefits that the users of these financial statements would receive from having the information. The Grain South Africa Board has therefore applied the undue cost or effort exemption in respect of the group's investment properties. As a result, investment property has been transferred to property, plant and equipment and is accounted for in terms of the relevant accounting policy set out in Note 2.7. 2.4 INVESTMENT IN SUBSIDIARIES An investment in a subsidiary is accounted for at cost less accumulated impairment losses. 2.5 INCOME Revenue is measured at the fair value of the consideration received or receivable. Revenue is shown net of value-added tax, returns, rebates and discounts. Revenue for the organisation is defined as administration and management fees, rental income and members contributions. Revenue for the group is defined as sale of goods, rendering of services, admin and management fees, rental income, members contribution, sponsorships and project income. Revenue from sale of goods is recognised to the extent that the group has transferred the significant risks and rewards of ownership of goods to the buyer and it is probable that economic benefits associated with the transaction will flow to the group and organisation and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Sponsorships are voluntary and accounted for when the funds are received. Management fees and project income are recognised to the extent that the organisation has rendered services under an agreement provided that the amount of revenue can be measured reliably and it is probable that economic benefits will flow to the organisation.
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