Page 84 - KZN Film Annual Report 2023/2024

KWAZULU-NATAL FILM COMMISSION
(Registration number M3/15/32 (834/15))
Annual Financial Statements for the year ended 31 March 2024
1.6 Intangible assets (continued)
An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows or service potential. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life.
The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.
Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.
Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.
Internally generated goodwill is not recognised as an intangible asset.
Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:
The entity discloses relevant information relating to assets under construction or development, in the notes to the financial statements.
1.7 Investments in associates
An investment in an associate is carried at cost as per GRAP 36.
The entity applies the same accounting for each category of investment.
The entity recognises a dividend or similar distribution in surplus or deficit in its separate annual financial statements when its right to receive the dividend or similar distribution is established.
Definition
Associate is an entity, including an unincorporated entity such as a partnership, over which the investor has significant influence and that is neither a controlled entity nor an interest in a joint venture.
Significant influence
If an investor holds, directly or indirectly (e.g. through controlled entities), 20 per cent or more of the voting power of the investee, it is presumed that the investor has significant influence, unless it can be clearly demonstrated that this is not the case. Conversely, if the investor holds, directly or indirectly (e.g. through controlled entities), less than 20 per cent of the voting power of the investee, it is presumed that the investor does not have significant influence, unless such influence can be clearly demonstrated. A substantial or majority ownership by another investor does not necessarily preclude an investor from having significant influence.
Initial recognition
The investment in an associate is initially recorded at cost (including transaction costs directly attributable to the acquisition of the investment) and the carrying amount is increased or decreased to recognise the investor’s share of surplus or deficit of the investee after the date of acquisition. The investor’s share of the surplus or deficit of the investee is recognised in the investor’s surplus or deficit.
Item
Depreciation method
Average useful life
Computer software, other
Straight line
3 - 10 years
ANNUAL REPORT 2023/2024 82