Page 241 - SAMRC Annual Report 2023-24

FINANCIAL INFORMATION

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

(CONTINUED)

1.8 Financial instruments (continued)

Impairment and uncollectability of financial assets
The entity assesses at the end of each reporting period whether there is any objective evidence that a
financial asset or group of financial assets is impaired.

Financial assets are measured at amortised cost:

If there is objective evidence that an impairment loss on financial assets measured at amortised cost has
been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows (excluding future credit losses that have not been
incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the
asset is reduced through the use of an allowance account. The amount of the loss is recognised in surplus
or deficit.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed by adjusting an allowance account. The reversal does not result in a carrying
amount of the financial asset that exceeds what the amortised cost would have been had the impairment
not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in
surplus or deficit.

If there is objective evidence that an impairment loss has been incurred on an investment in a residual
interest that is not measured at fair value because its fair value cannot be measured reliably, the amount of
the impairment loss is measured as the difference between the carrying amount of the financial asset and
the present value of estimated future cash flows discounted at the current market rate of return for a similar
financial asset. Such impairment losses are not reversed.

Presentation
Interest relating to a financial instrument is recognised as revenue in surplus or deficit.

Dividends or similar distributions relating to a financial instrument or a component that is a financial liability
is recognised as revenue or expense in surplus or deficit.
Losses and gains relating to a financial instrument or a component that is a financial liability is recognised
as revenue or expense in surplus or deficit.
1.9 Statutory receivables

Identification
Statutory receivables are receivables that arise from legislation, supporting regulations, or similar means,
and require settlement by another entity in cash or another financial asset.

Carrying amount is the amount at which an asset is recognised in the statement of financial position.

The cost method is the method used to account for statutory receivables that requires such receivables
to be measured at their transaction amount, plus any accrued interest or other charges (where applicable)
and, less any accumulated impairment losses and any amounts derecognised.
The transaction amount (for purposes of this Standard) for a statutory receivable means the amount
specified in, or calculated, levied or charged in accordance with, legislation, supporting regulations, or
similar means.

SAMRC ANNUAL REPOR T 2023-24 239