Page 44 - SABN AR 2021

1.2 Property, plant and equipment
All items of property, plant and equipment are initially recognised at cost. Costs include expenditures that are directly attributable to the acquisition of an asset. The cost of an item of property, plant and equipment is recognised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably.
According to IAS 16.43, property, plant and equipment is subsequently measured at cost less accumulated depreciation and accumulated impairment losses. Land is not depreciated and is subsequently carried at cost less accumulated impairment losses. Depreciation is provided on a straight-line basis over the estimated useful life of the assets to their residual values as follows:
– buildings:
– plant and equipment: – key point assets:
– furniture and vehicles: – work in progress:
50 years;
5 to 20 years;
1 to 20 years;
3 to 20 years; and not depreciated.
Parts of some items of tools and equipment may require replacement at regular intervals. Subsequent expenditure relating to the cost of replacing parts of such an item of plant and equipment is recognised in the carrying amount of that plant and equipment when the cost is incurred and the recognition criteria are met. All other subsequent expenditure relating to the repairs and maintenance of the item is recognised as an expense in profit or loss when incurred.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset is included in profit or loss when the item is derecognised.
The residual values, useful lives and depreciation methods of the assets are reviewed and adjusted, if appropriate, at each financial year-end.
Additions to property, plant and equipment which are not available for use at the acquisition date are allocated to work in progress and thereafter capitalised to the asset account once the asset is brought into use, after which depreciation will commence.
The Company is a national key point, as defined in section 1 of the National Key Points Act 102 of 1980. Key point assets are those assets which provide sufficient security against loss, damage, disruption or immobilisation of the Company.
1.3 Intangible assets Computer software
Intangible assets acquired separately are initially recognised at cost. An intangible asset is recognised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. Intangible assets are held at cost less accumulated amortisation and accumulated impairment.
Acquired computer software licenses and direct software development costs are capitalised only if the expenditure can be measured reliably, the process and/or product is technically and commercially feasible, if future economic benefits are probable, and/or if the company intends − and has sufficient technical, financial and other resources – to complete development and to use or sell it. Any other development expenditure that does not meet the criteria for capitalisation is recognised in profit or loss, as incurred.
Work in progress consists of items under construction and is measured at cost. Work in progress is transferred to the related category of assets and amortised accordingly when the asset is completed and available for use. Amortisation is provided on a straight-line basis over the estimated useful life of the assets to their residual values as follows:
– Computer software: 3 to 10 years.
The residual values and useful lives of these assets are reviewed and adjusted if appropriate.
44 Annual Report 2021
South African Bank Note Company (RF) Proprietary Limited