32. Base cost of identical assets
(1) This paragraph applies to assets which form part of a holding of identical assets.
(2) For the purposes of this paragraph “identical assets” means a group of similar assets which-
(a) if any one of them were disposed of, would realise the same amount regardless of which of them was so disposed of; and
(b) are not able to be individually distinguished apart from any identifying numbers which they may bear.
(3) Subject to subparagraphs (3A) and (3B), the base cost of identical assets must be determined by using one of the following methods-
(a) specific identification; or
(b) the first in first out method.
(3A) The weighted average method of determining base cost of assets, as contemplated in subparagraph (4), may be used for identical assets that do not constitute assets contemplated in subparagraph (3B) and which-
(a) from the date of acquisition to the date of disposal constituted assets contemplated in paragraph 31(1)(a), other than instruments contemplated in item (d);
(b) constitute participatory interests –
(i) contemplated in paragraph 31(1)(c), where the prices of these participatory interests or shares are regularly published in a national or international newspaper;
(ii) in any portfolio comprised in any collective investment scheme managed or carried on by a company registered as a manager under section 42 of the Collective Investment Schemes Control Act for purposes of Parts IV an V of that Act; or
(iii) in any arrangement or scheme contemplated in paragraph (e)(ii) of the definition of ‘company’ in section 1 of the Act, which is approved in terms of section 65 of the Collective Investment Schemes Control Act by the Registrar as defined in section 1 of the latter Act;
(c) constitute coins made mainly from gold or platinum, where the prices of these coins are regularly published in a national or international newspaper; or
(d) from the date of acquisition to the date of disposal constituted instruments as defined in section 24J that were listed on a recognised exchange and for which a price was quoted on that exchange,
and where a person uses the weighted average method for any identical asset contemplated in item (a), (b), (c) or (d), that method must be used for all identical assets, contemplated in that item, held by that person.
(3B) The weighted average method of determining base cost of assets, as contemplated in subparagraph (4), must be used for identical assets that are, in terms of section 29A, allocated to all the policyholder funds of an insurer as defined in that section: Provided that this subparagraph must not apply to any asset-
(a) that constitutes-
(i) an instrument as defined in section 24J(1);
(ii) an interest rate agreement as defined in section 24K(1);
(iii) a contractual right or obligation the value of which is determined directly or indirectly with reference to-
(aa) an instrument contemplated in subparagraph (i);
(bb) an interest rate agreement contemplated in subparagraph (ii); or
(cc) any specified rate of interest;
(iv) trading stock; or
(v) a policy of reinsurance; or
(b) held by an insurer if that insurer is a Category III Financial Services Provider as defined in section 29B(1) and that asset is held by that insurer in its capacity as a Category III Financial Services Provider.
(4) In applying the weighted average method of determining base cost-
(a) the weighed average base cost, on valuation date, of identical assets acquired and not disposed of before valuation date is equal to the valuation date value of those identical assets, as contemplated in paragraph 28, or the market value of those identical assets, as contemplated in paragraph 29, divided by the number of those identical assets; and
(b) the weighted average base cost, thereafter, of identical assets must be calculated by-
(i) adding expenditure allowable in terms of paragraph 20 in respect of identical assets to the base cost of identical assets acquired and not disposed of before that expenditure was incurred; and
(ii) dividing that amount by the number of identical assets acquired and not disposed of after that expenditure was incurred.
(5) ……….
(6) Once a person has adopted one of the methods specified in this paragraph in respect of a class of identical assets contemplated in subparagraph (3A), that method must be used until all those identical assets have been disposed of.