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DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
DURBAN UNIVERSITY OF TECHNOLOGY
BAN UNIVERSITY OF TECHNOLOGY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
1. ACCOUNTING POLICIES (continued)
1.18 Normal tax and deferred tax (continued)
Value-added tax
Revenue, expenses and assets are recognised net of the amount of value-added tax except:
 where the value-added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value-added tax is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable, and
 Receivables and payables that are stated with the amount of valued-added tax included.
The net amount of value-added tax recoverable from, or payable to, the taxation authority is included as part of receivables or trade and other payables in the statement of financial position.
1.19 Foreign currency translation
The University’s financial statements are presented in Rands, which is also the University’s functional currency. Transactions in foreign currencies are initially recorded by the University at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. All differences are taken to surplus and deficit.
1.20 IFRS 16 Leases (“IFRS 16”) – lessees and lessors
The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognised in the
statement of financial position on the 1 January 2020 is 10%.
The University had the following category of leases as at 1 January 2020:
Category
Outsourced residences
Property Equipment
Description
The University enters into contracts with third party service providers for student accommodation over a 36-month period. Based on the IFRS 16 scoping criteria, these contracts are included within the scope of IFRS 16.
However, due to the fact that all payments are variable as they are based on the monthly occupancy of each residence, the outsourced residences have not been capitalised under IFRS 16.
The University leases properties on a fixed monthly rental basis for periods in excess of 12 months. These leases have been capitalized under IFRS 16.
The University leases various types of photocopiers on a 5-year basis. Photocopiers that were not classified as low-value assets have been classified under IFRS 16.
Incremental borrowing rate
Not applicable
Prime (10%)
Discount rate applied is prime (10%) plus 1.5% fixed for the period which is consistent with that applied by the service provider.