Page 167 - WCPP Annual Report 2021-22_Draft #7.6.2

Annual Report for the 2021/22 Financial Year
Vote 2: Western Cape Provincial Parliament
Part E: Financial Information for the year ended 31 March 2022

Accounting Policies

1.16 Translation of foreign currencies

Foreign currency transactions

A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot

exchange rate between the functional currency and the foreign currency at the date of the transaction.

At each reporting date:
Ÿ foreign currency monetary items are translated using the closing rate;
Ÿ non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction; and
Ÿ non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at
which they were translated on initial recognition during the period or in previous annual financial statements are recognised in
surplus or deficit in the period in which they arise.

1.17 Comparative figures

Prior period comparative information has been presented in the current year’s financial statements. Where necessary figures
included in the prior period financial statements have been reclassified to ensure that the format in which the information i s

presented is consistent with the format of the current year’s financial statements.

1.18 Unauthorised expenditure

Unauthorised expenditure means:
Ÿ overspending of Parliament's approved budget or a main division within that budget; and
Ÿ any expenditure from Parliament's approved budget or a main division within that budget for a purpose unrelated to
the approved budget or main division, subject to section 72; and

Ÿ any expenditure of donor funds for a purpose not specified in the agreement with the donor.
All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in the

year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where

recovered, it is subsequently accounted for as revenue in the statement of financial performance.
1.19 Fruitless and wasteful expenditure

Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been
exercised.

All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial

performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the

expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.
1.20 Irregular expenditure
The Financial Management of Parliament and Provincial Legislators Act No. 10 of 2009 defines irregular expenditure as

expenditure, other than unauthorised expenditure, incurred in contravention of, or that is not in accordance with, a requirement of

any applicable legislation, including -
(a) this Act; or
(b) any provincial legislation providing for procurement procedures in that provincial government.
All expenditure relating to irregular expenditure is recognised as an expense in the statement of financial performance in the

year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and where
recovered, it is subsequently accounted for as revenue in the statement of financial performance.

1.21 Accumulated surplus

The accumulated surplus represents the net difference between the total assets and the total liabilities of the entity. Any
surpluses and deficits realised during a specific financial year are credited/debited against accumulated surplus/deficit. Prior
year adjustments, relating to income and expenditure, are debited/credited against accumulated surplus when retrospective
adjustments are made.

Annual Report for 2021/22 Financial Year Page 152