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## 3.1 Fully Depreciated Assets 

The auditors noted that as in the previous years, management had not performed a formal review (except for motor vehicles) for a number of fully depreciated assets in the assets register to determine whether the assets were in use or needed to be de- recognised, indicating possible non-compliance with International Accounting Standard 16 which requires a review of useful lives of assets on a regular basis. Fully depreciated assets as at 31 March 2018 were as follows: 

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In response management stated that even though the assets were fully depreciated they were still in use and therefore the Corporation continued to derive economic benefits from the assets as well as incurred maintenance costs to ensure they were operational and as such could not be de-recognised. 

## 3.2 Revenue – Route Tariffs 

The auditors noted that the Corporation had not obtained approval from the Minister for tariff changes made during the year under review, indicating non-compliance to Section 18 of Air Botswana Act which requires approval of tariffs for air transport services by the Minister. 

In response management indicated that fares were influenced by competition, demand and seasonal promotions which require adjustments to fares to the prevailing conditions which could be as frequent as daily, weekly, etc. A consultative process would seriously impact on the decision making and the ability to take advantage of prevailing conditions at the time. 

## 3.3 Classification of Strategic Spares 

The auditors noted that contrary to International Accounting Standard 16 (IAS16) which requires that items such as spare parts, stand-by equipment and servicing equipment be recognised in accordance with IAS 16 when they meet the definition of property, plant and equipment (PPE), management had not performed a formal evaluation in order to determine whether any spare parts as such nature classified as inventory were re- classified as PPE. Consequently, there was a total of P1.2 million 

