Page 233 - SAMRC Annual Report 2023-24

FINANCIAL INFORMATION

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024
SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

1.3 Significant judgements and sources of estimation uncertainty
(continued)

Trade receivables and loans and receivables
The entity assesses its trade receivables and loans and receivables for impairment at the end of each
reporting period. In determining whether an impairment loss should be recorded in surplus or deficit, the
entity makes judgements as to whether there is observable data indicating a measurable decrease in the
estimated future cash flows from a financial asset.
The impairment for trade receivables and loans and receivables is calculated on a portfolio basis, based
on a review of the full trade debtors book, adjusted for national and industry-specific economic conditions
and other indicators present at the reporting date that correlate with defaults on the portfolio.

Fair value estimation
The fair value of financial instruments traded in active markets (such as trading) is based on quoted market
prices at the end of the reporting period. The quoted market price used for financial assets held by the
entity is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined by using valuation techniques. The entity uses a variety of methods and makes
assumptions that are based on market conditions existing at the end of each reporting period. Quoted
market prices or dealer quotes for similar instruments are used for financial assets. Other techniques, such
as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the
future contractual cash flows at the current market interest rate that is available to the entity for similar
financial instruments.

Impairment testing
The entity reviews and tests the carrying value of current and non-current assets when events or changes in
circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest
level for which identifiable cash flows are largely independent of cash flows of other assets and liabilities. If
there are indications that impairment may have occurred, estimates are prepared of expected future cash
flows for each group of assets. Expected future cash flows used to determine the value in use of tangible
assets are inherently uncertain and could materially change over time. They are significantly affected by a
number of factors including supply demand, together with economic factors such as research units closed
as part of the revitalisation process.

Provisions
Provisions were raised and management determined an estimate based on the information available.
Additional disclosure of these estimates of provisions are included in note 15 – Provisions.

Post retirement benefits
The present value of the post retirement obligation depends on a number of factors that are determined
on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost
(income) include the discount rate. Any changes in these assumptions will impact on the carrying amount
of post retirement obligations.

SAMRC ANNUAL REPOR T 2023-24 231