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Hyprop Investments Limited
Integrated annual report and consolidated financial statements
2017
103
1.
Accounting policies and presentation of consolidated financial statements
continued
1.13
Impairment
Financial assets
Financial assets, other than those at fair value through profit or loss, are assessed at each reporting date to determine whether there is any evidence
of impairment. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on
the estimated future cash flow of that asset. An impairment loss is recognised immediately in profit or loss.
Non-financial assets
The carrying amounts of the group’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, the asset’s recoverable amount is estimated.
The recoverable amount of an asset is the greater of its value-in-use and its fair value less costs to sell. Value-in-use is based on the estimated future
cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount, and is
recognised in profit or loss. Goodwill is tested for impairment annually.
An impairment loss is reversed, with the exception of goodwill, if there has been a change in the estimates used to determine the recoverable amount
and there is an indication that the impairment loss no longer exists.
An impairment loss is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount that would have been
determined, net of depreciation, if no impairment loss had been recognised.
1.14 Stated capital
Ordinary shares are classified as equity. External costs directly attributable to the issue of new shares are shown as a deduction from equity.
1.15
Treasury shares
Company shares held by Hyprop Investments Employee Incentive Scheme Proprietary Limited (incorporated for the benefit of employees) that have
not yet vested are classified as treasury shares on consolidation and presented as a deduction from equity. These shares are held at cost.
On purchase, the cost of the shares acquired is deducted from equity. Subsequently, any gain or loss on the sale or cancellation of the company’s
own equity instruments is recognised directly in equity.
Both distributions and unrealised losses on own shares are eliminated from group profit for the year.
1.16 Dividends
Dividends to shareholders are recognised directly in equity on the date of declaration. Dividends received from subsidiaries or investee companies
are recognised on declaration by the subsidiary or investee company.
1.17
Foreign currency
Foreign currency transactions are translated to the respective functional currency of the group at the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rates
at that date.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the
exchange rates at the dates that the fair values were determined.
Foreign currency differences arising on translation are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the group’s
presentation currency (Rand) at the exchange rates at the reporting date. The income and expenses of foreign operations are translated to Rand at
the dates of the transactions (an average rate is used).
Foreign currency translation reserve
If the group disposes of a part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed
to NCI. When the group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant
proportion of the cumulative amount is reclassified to profit or loss.
1.18 Employee benefits
Short-term benefits
The cost of short-term employee benefits is recognised as an expense during the period in which the employees render the related service.
Short-term employee benefits are measured on an undiscounted basis. The accrual for employee entitlements to salaries, bonuses and annual leave
represents the amount which the group has a present legal or constructive obligation to pay as a result of the employees’ services provided up to the
reporting date.