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Provincial Waterworks Authority Annual Report 2023 243

3. Significant Accounting Policies (Cont.)
3.7 Related Parties
PWA’s related parties mean individuals or enterprises that have the authority to control PWA,
or are controlled by PWA directly or indirectly, or under the common control with PWA. Besides, related
parties include associated companies, key management personnel, and PWA board of directors, as well as
transactions that key management personnel or board of directors have the authority to control or jointly
control or have significant influence directly or indirectly.
In consideration of the relationship between related parties and the PWA, PWA focuses on
the substance of the relationship not merely on the legal form.
3.8 Property, Plant and Equipment, and Intangible Assets
Property, plant and equipment, and intangible assets are stated at cost on the date of purchase
or acquisition, deducting accumulated depreciation, accumulated amortization, allowance for impairment,
and allowance from revaluation of assets.
Laid pipelines and durable articles transferred from the Department of Public Works and the
Department of Health are presented according to their conditions using the appraised value on the date of
transfer (28 May 1979).
Donation property received from the state and transferred from sanitation waterworks in
conformity with the Cabinet’s resolution is stated at the received or appraised value on the acquisition date.
Property received from private sector in the form of donation, transfer, and concession is recognized as
revenue in full amount in the period of occurrence. Building and equipment acquired in the same method,
are stated as deferred revenue in non-current liabilities which are gradually recognized as revenue at the
rate of 12.5 and 3.33 percent per year over their useful lives of building and equipment, respectively.

Water meters already installed and ready to use conducted by PWA, customers, donated
meters, or customers transferred from other agencies within the year ended are stated at cost on the
acquisition date including wage and installation fee.
Intangible assets comprised the copyrights of Application Software purchased for use are stated
at cost after deducting the accumulated amortization.
PWA recognizes demolished cost of construction located on leased land, as a part of assets
with present value of the demolishment cost estimate as at the end of the lease contract deducting by
the depreciation of assets over their useful lives of the land lease contract.
3.9 Depreciation and Amortization
Depreciation is calculated by using the straight-line method over the estimated useful lives of
each type of durable assets at the annual rate of 2 - 33.33 percent of the asset value after deducting the
depreciation cost. The salvage value is at the rate of 0 - 20 percent of the asset costs.
Depreciation of assets built in royal property is calculated according to the useful life of
each type of asset since PWA has a policy to extend the royal property lease agreement with the
Treasury Department to the expiration of the asset’s useful life.
Depreciation of assets transferred from other agencies purchased by PWA and donated
assets that generate income directly, including water meters, are stated as expenses in the profit and
loss statement.
Right of possession over royal property (buildings and structures) is amortized by a straight-line
method at the depreciation rate, excluding unamortized right of possession over royal land.
Intangible assets are amortized by a straight-line method at the annual rate of 20 percent.