Page 168 - WCPP Annual Report 2021-22

Page 168 - WCPP Annual Report 2021-22_Draft #7.6.2

P. 168

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

1.22 Commitments

Commitments are recorded at cost in the notes to the ﬁnancial statements when there is a contractual arrangement or an

approval by management in a manner that raises a valid expectation that the legislature will discharge its responsibilities

thereby incurring future expenditure that will result in the outﬂow of cash.

1.23 Grants in aid
The legislature transfers money to individuals, organisations and other sectors of government from time to time. When making
these transfers, the legislature does not:

Ÿ receive any goods or services directly in return, as would be expected in a purchase or sale transaction;

Ÿ expect to be repaid in future; or

Ÿ expect a ﬁnancial return, as would be expected from an investment.
These transfers are recognised in the statement of ﬁnancial performance as expenses in the period that the events giving rise to
the transfer occurred.
1.24 Budget comparison

The statement of ﬁnancial performance is on accrual basis, while the budget is on cash basis. Therefore the actual amounts as per
the ﬁnancial statements are adjusted to be compared to the budget on a cash basis.

The approved budget covers the ﬁscal period from 01-Apr-21 to 31-Mar-22.

The annual ﬁnancial statements and the budget are not on the same basis of accounting therefore a reconciliation between the
statement of ﬁnancial performance and the budget have been included in the annual ﬁnancial statements.

1.25 Related parties

A related party is a person or an entity with the ability to control or jointly control the other party, or exercise signiﬁcant inﬂuence
over the other party, or vice versa, or an entity that is subject to common control, or joint control.

Management are those persons responsible for planning, directing and controlling the activities of the legislature, including
those charged with the governance of the legislature in accordance with legislation, in instances where they are required to
perform such functions.

Close members of the family of a person are considered to be those family members who may be expected to inﬂuence, or be

inﬂuenced by, that management in their dealings with the legislature.

Transactions with related parties are disclosed.

1.26 Events after reporting date

Events after reporting date are those events, both favourable and unfavourable, that occur between the reporting date and the

date when the ﬁnancial statements are authorised for issue. Two types of events can be identiﬁed:

Ÿ those that provide evidence of conditions that existed at the reporting date (adjusting events after the reporting date);
and

Ÿ those that are indicative of conditions that arose after the reporting date (non-adjusting events after the reporting
date).

The legislature will adjust the amount recognised in the ﬁnancial statements to reﬂect adjusting events after the reporting date

once the event occurred.

The legislature will disclose the nature of the event and an estimate of its ﬁnancial effect or a statement that such estimate
cannot be made in respect of all material non-adjusting events, where non-disclosure could inﬂuence the economic decisions of
users taken on the basis of the ﬁnancial statements.

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