Die toepaslikheid van deeltitelheffings in Suid–Afrika

Thesis (M.Com. (Management Accountancy))--North-West University, Potchefstroom Campus, 2011According to the Sectional Titles Act 95 of 1986, levies are assigned according to the size of a unit, in other words a unit’s participation quota. These levies are used to finance a complex’s insurance, common property electricity and water, lift maintenance, audit fees, management agent fees, salaries and wages, security, swimming pool expenses and general building maintenance. According to the Traditional Costing System, indirect costs are allocated based on a single cost actual expenses over a year are dissected. A regression and correlation analysis was done on the relationship between costs, participation quota and levies. The contribution of the study is that it empirically determines the behaviour of cost items in order to allocate indirect costs more accurately. Consequently, this will result in improved reasonability and will eliminate the cross-subsidisation of units. The objectives were reached as follows: The first objective was reached when it was proved through empirical studies that the Sectional Title is not fair when it states that the allocation of levies must be according to floor space. The second objective was reached when both participation quota and units per complex were identified as cost drivers for each cost item. The third objective was reached by allocating the levy on a 50 percent base according to units and a 50 percent base according to the total area. This could be refined by each complex according to the unique need of the complex driver. However, various indirect costs are not necessarily subject to this single cost driver. In practice, it has been proven that high volume products are proportionally taxed with indirect costs when compared to low volume products. In many complexes, owners with larger units are of the opinion that their larger units are subsidising those owners with smaller units. In contrast to the traditional costing system, activity-based costing recognises that indirect costs can also be assigned by use of multiple cost drivers. Since these multiple cost drivers – which affect the way costs are assigned – can be identified, indirect costs are assigned more accurately. This study investigates the current method of cost allocation, whereby costs are assigned via participation quota, and makes suggestions on how these costs can be assigned on a more accurate and fair basis in practice. The goal of this study is to challenge the reasonability of the Sectional Titles Act. The objectives of the dissertation are firstly, to determine the cost behaviour of various cost items and whether the participation quota is a fair cost driver for determining the levies that are to be paid; secondly, it investigates alternative cost drivers that will be more applicable to certain cost items; thirdly, to suggest a cost formula to replace the current cost method, that being the allocation of indirect costs via participation quota. Empirical methods have been used in the research. The empirical research was performed using data obtained from ANGOR Property Specialists (Pty) Ltd’s database. A sample of 113 complexes was extracted from the database of which the actual expenses over a year are dissected. A regression and correlation analysis was done on the relationship between costs, participation quota and levies. The contribution of the study is that it empirically determines the behaviour of cost items in order to allocate indirect costs more accurately. Consequently, this will result in improved reasonability and will eliminate the cross-subsidisation of units. The objectives were reached as follows: The first objective was reached when it was proved through empirical studies that the Sectional Title is not fair when it states that the allocation of levies must be according to floor space. The second objective was reached when both participation quota and units per complex were identified as cost drivers for each cost item. The third objective was reached by allocating the levy on a 50 percent base according to units and a 50 percent base according to the total area. This could be refined by each complex according to the unique need of the complex.Master