Elizabeth, capital asset depreciation in SA is usually in equal parts over 5 years, however there are some exceptions. exporters and agricultural businesses can write off capital assets in 3 years, in 50%, 30% and 20% tranches. there's also a wear and tear allowance on non-manufacturing fixed assets between 5 - 20% per annum.
as for orebodies, the SA miners used to generally employ appropriation accounting, i.e. instead of breaking out depreciation separately, it used to be included in mining costs, on the theory that an orebody is anyway a wasting asset (with this method,no charge is made for amortization of mining assets or depletion. ongoing CapEx is charged to the income statement, while an amount equal to expenditure on other major capital items is appropriated from income in the year it is incurred. the production pipeline is treated as part of the capitalised asset base, and is appropriated for accordingly. Metal in process is not accounted for in inventory. The international accounting standard treats such material as inventory).
lately, many SA mining houses do present their accounts using international accounting standards for mining assets as well, in order to make it easier for investors to compare their financial results with non-SA mining firms. so now BOTH appropriation accounting statements (which have to be done to comply with SA's statutory reporting rules) and IAS statements are usually presented. |
