Page 11 - UniZulu Annual Report 2020

Claims are submitted to the Registrar’s office for processing. Four honorarium categories exist as per Table 1, namely:
Table 1: Honorarium Categories
SUSTAINABILITY AND VIABILITY
In addressing UNIZULU’s going concern assumption, the three main factors considered were:
• Liquidity – UNIZULU’s ability to meet its financial
obligations in the short and long term
• Solvency – UNIZULU’s ability to maintain a net asset
position
• Operating Sustainability – UNIZULU’s ability to continue
operating at current levels
The University also considered the impact of the COVID-19 pandemic on the University’s finances. The main considerations were:
Impairment of property, plant and equipment and
intangible assets
The University assessed whether the impact of COVID-19 triggered an impairment assessment and, whether an asset impairment has occurred.
• Due to the nature of the University’s owned immovable
assets, no risk of impairment was identified as a result of the COVID-19 pandemic, however, since the University buildings are carried at a revaluation model, the University decided to re-evaluate the values, including the COVID-19 impact on the input assumptions.
• Due to the nature of the University’s owned movable assets, no risk of impairment was identified as a result of the COVID-19 pandemic.
• Due to the nature of the University’s intangible assets, no risk of impairment was identified as a result of the COVID-19 pandemic.
• Due to the nature of the University’s right of use assets, being external residence leases and motor vehicle leases, the input assumptions have considered the impact of COVID-19 in respect of external residences leases and there was no risk identified for motor vehicles in respect of COVID-19.
Net realisable value of inventory
The University assessed whether inventory is held at the appropriate carrying value, being the lower of cost or net realisable value, as at 31 December 2020. Due to the nature of inventory being kept by the University, the COVID-19 impact was assessed, and no risk was identified as a result of the COVID-19 pandemic. A substantial part of the value of inventories consists of laptops which are stored at a secure location, and are carried at cost being equal to the net realisable value as laptops are sold at cost.
Recoverability of receivables
• Universities are likely to be impacted by the loss of students and significant reductions in debt being paid due to students experiencing financial or cash flow difficulties.
• UNIZULU’s student population is mostly funded students, with over 90% of students in 2020 being funded, thus no significant COVID-19 risk was identified in terms of the 2020 financial period.
• 100% of the non-funded current and long outstanding debt as at year-end is provided for as part of the provision for doubtful debt, which caters for risks such as the COVID-19 financial impact on current and prior students.
• Most of the long outstanding debt owed by students is also part of the various claim methods provided by NSFAS, such as historic debt claims, Close-out Report claims and Top-up claims.
• Long outstanding debt not catered for by these claim methods are being collected by the University regularly. The COVID-19 impact of such collections was negligible since the debt that is collected has already been provided for as part of the provision for doubtful debts in previous financial years.
• Adjustments due to the 2020 extended academic year were made on the student debt for 2020 because of the COVID-19 pandemic.
Recognition provisions, including onerous
contracts
For a provision to be recognised, there must be a present obligation (legal or constructive) as at the reporting date because of a past event, i.e. there must be an obligating event, it must be probable that the University will have an outflow of economic benefit, and the amount of the obligation can be estimated reliably. Management has considered the impact of the COVID-19 pandemic on all its provisions as at 31 December 2020. No onerous contracts were identified as at year-end.
HONORARIUM TYPES
AMOUNT
Standard Honorarium
R2 500
Council Chair Honorarium
R3 500
Chair of Sub-committee
R3 000
Attendance of Sub-committee
R2 500
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UNIVERSITY OF ZULULAND ANNUAL REPORT 2020