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AFRICAN DAWN ANNUAL REPORT 2020

Accounting Policies continued

1.7 Income taxes

Tax expense
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement.

Current taxation

Current taxation is the expected tax payable on the taxable income for the year, using taxation rates enacted or substantively enacted at the
reporting date, and any adjustment to taxation payable in respect of previous years (prior-period tax paid).

Deferred tax
Deferred taxation is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes.
Deferred taxation is recognised in profit or loss for the period, except to the extent that it relates to a transaction that is recognised directly in
equity or in other comprehensive income, or a business combination that is accounted for as an acquisition.
Deferred taxation assets are recognised to the extent that it is probable that future taxable income will be available against which the unutilised
taxation losses and deductible temporary differences can be used. Deferred taxation assets are reviewed at each reporting date and are reduced to
the extent that it is no longer probable that the related taxation benefits will be realised.

1.8 Property, plant and equipment
Property, plant and equipment is carried at historical cost less accumulated depreciation and any accumulated impairment losses.

An item of property, plant and equipment is recognised as an asset when it is probable that future economic benefits associated with the item will
flow to the company, and the cost of the item can be measured reliably.
Depreciation is recognised so as to write off the cost of assets over their estimated useful lives, to their residual values. The straight-line method is
used and the estimated useful lives are as follows:
Property, plant and equipment

Item Depreciation method Average useful life
Land and buildings - right of use assests Straight line Per lease agreement
Furniture and fixtures Straight line 4 - 10 years
Motor vehicles Straight line 5 - 10 years
Office equipment Straight line 3 - 10 years
IT equipment Straight line 3 - 5 years
The depreciation method, residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.

If the recoverable amount is less than the carrying amount then the carrying amount is impaired in line with policy 1.10.

1.9 Intangible assets

Computer software - internally generated
Costs associated with maintaining computer software programmes are recognised as an expense as incurred.

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are
recognised as intangible assets when the following criteria are met.

• it is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product for use;
• there is an ability to use the software product;

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