Postal Services Act, 1998 (Act No. 124 of 1998)Accounting Separation Regulations for Reserved Postal Services8. Accounting Separation Principles |
| 1) | Accounts must be prepared on a Fully Allocated Cost basis, whereby all the revenues, costs, assets and liabilities are allocated to segments according to the accounting separation principles specified in this section of the Accounting Manual. |
| 2) | The licensed Operator must ensure that the accounting separation methodology adheres to the key principles of causality, objectivity, consistency, transparency, and sampling. |
| a) | Causality refers to the attribution of revenues, costs, assets and liabilities to segments on the basis of how those segments cause the revenues to be earned, costs to be incurred or assets to be acquired. Where it is not possible to attribute revenues, costs, assets and liabilities in accordance with the preceding paragraph, the attribution must be such as to reasonably present the revenues, costs, assets and liabilities accounted for by the segments, and to present a reasonable comparison between the segments |
| b) | The attribution must be objective and not intended to benefit the Licensed Operator or any other operator, business or service. |
| c) | There must be consistency of treatment of revenues, costs and assets from year to year. Where there are material changes to the basis and method of revenue, cost, asset or liability attributions, the operator must restate those parts of the previous year's Regulatory Financial Statements affected by the changes, to the extent that prior period financial and non-financial data is available. |
| d) | The attribution methods used must be transparent. Revenues, costs, assets and liabilities attributed to cost pools must be traceable back to their source in the Licensed Operators' accounting records. |
| e) | Where sampling is used to derive the attribution of revenues, costs, assets and liabilities, it must be based either on generally accepted statistical techniques or other methods that should result in the reasonable attribution of revenues, costs, assets and liabilities. |
| f) | Where spare capacity occurs in circumstances when the Licensed Operator provides for more retail outlets or expand operations to accommodate anticipated growth in operations, the cost of such spare capacity must be allocated to segments in the same proportion as used capacity. |
| g) | Where single revenue is bundled for a group of products and services (two or more services combined into a packaged offering) e.g. large business contracts, or E-post at a bundled price, such a price must be unbundled and allocated to respective segments in relation to the costs associated with the individual elements comprising the bundled revenue stream. |