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NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS
continued
For the year ended 31 May 2016
BLUE LABEL INTEGRATED ANNUAL REPORT 2016
130
4.
Non-financial instruments
continued
4.3 Property, plant and equipment
Property, plant and equipment is initially recorded at historical cost, being the purchase cost plus any cost to prepare
the assets for their intended use. Historical cost includes expenditure that is directly attributable to the acquisition
of the item. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the
income statement during the financial year in which they are incurred.
Property, plant and equipment is subsequently carried at historical cost less accumulated depreciation and any
accumulated impairment losses.
Major leasehold improvements are amortised over the shorter of their respective lease periods and estimated useful lives.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at year-end. Where the assets’
residual value is higher than the carrying value, no depreciation is provided.
Gains and losses on disposal of property, plant and equipment are determined as the difference between the
carrying amount and the fair value of the sale proceeds, and are included in operating profit.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down
immediately to its recoverable amount.
Computer
equipment
R’000
Furniture
and fittings
R’000
Motor
vehicles
R’000
Year ended 31 May 2016
Opening carrying amount
23 047
2 560
7 843
Additions
15 812
683
6 445
Disposals
(81)
(6)
(1 198)
Disposal of subsidiary
(1 735)
(466)
—
Depreciation charge
(14 188)
(845)
(3 046)
Closing carrying amount
22 855
1 926
10 044
At 31 May 2016
Cost
77 940
7 922
16 747
Accumulated depreciation
(54 915)
(5 292)
(6 703)
Accumulated impairments
(170)
(704)
—
Carrying amount
22 855
1 926
10 044
Year ended 31 May 2015
Opening carrying amount
16 561
2 245
7 342
Additions
17 834
1 202
3 992
Acquisition of subsidiary
1 428
89
—
Disposals
(116)
—
(875)
Disposal of subsidiary
(64)
—
—
Depreciation charge
(12 596)
(976)
(2 616)
Closing carrying amount
23 047
2 560
7 843
At 31 May 2015
Cost
72 529
10 835
14 974
Accumulated depreciation
(49 312)
(7 571)
(7 131)
Accumulated impairments
(170)
(704)
—
Carrying amount
23 047
2 560
7 843
There are no property, plant and equipment assets that are encumbered.
The residual values of buildings are estimated to be higher than the carrying value and therefore there is no
depreciation charge.