Page 235 - SAMRC Annual Report 2023-24

FINANCIAL INFORMATION

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024
SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

1.4 Biological assets that form part of an agricultural activity
(continued)

Biological assets are measured at their fair value less costs to sell.

Agricultural produce harvested from an entity’s biological assets shall be measured at its fair value less
estimated costs to sell at point of harvest.

A gain or loss arising on initial recognition of biological assets at fair value less costs to sell and from a
change in fair value less estimated costs to sell biological assets is included in surplus or deficit for the
period in which it arises.

Where biological assets are acquired at no cost, or for a nominal cost, the cost is determined to be its fair
value less costs to sell as at the date of acquisition.

Where fair value cannot be measured reliably, biological assets are measured at cost less any accumulated
impairment losses.

Horses are classified as biological assets.

1.5 Property, plant and equipment

Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held
for use in the production or supply of goods or services, rental to others, or for administrative purposes,
and are expected to be used during more than one period.
The cost of an item of property, plant and equipment is recognised as an asset when:
• it is probable that future economic benefits or service potential associated with the item will flow to
the entity; and
• the cost or fair value of the item can be measured reliably.

Property, plant and equipment is initially measured at cost.
The cost of an item of property, plant and equipment is the purchase price and other costs attributable
to bring the asset to the location and condition necessary for it to be capable of operating in the manner
intended by management. Trade discounts and rebates are deducted in arriving at the cost. Subsequent
costs of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
the asset if it is probable that the future economic benefits embodied within the part will flow to the entity
and its costs can be measured reliably. The cost of the replaced part is derecognised. The costs of day to
day servicing of property, plant and equipment are recognised in the surplus or deficit.

Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at the date of
acquisition.

When significant components of an item of property, plant and equipment have different useful lives, they
are accounted for as separate items (major components) of property, plant and equipment.

The entity identified the following major components of buildings as generators; buildings; prefabricated
buildings; borehole tanks and pumps; water meters; water pipes and air conditioners.

The entity identified the following major components of laboratory equipment as laboratory equipment
and irrigation equipment.

SAMRC ANNUAL REPOR T 2023-24 233