Page 243 - SAMRC Annual Report 2023-24

FINANCIAL INFORMATION

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

(CONTINUED)

1.11 Leases

Operating leases – lessor
Operating lease revenue is recognised as revenue on a straight-line basis over the lease term.

Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount
of the leased asset and recognised as an expense over the lease term on the same basis as the lease
revenue.

Income for leases is disclosed under revenue in the statement of financial performance.

Operating leases – lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The
difference between the amounts recognised as an expense and the contractual payments are recognised
as a prepayment or liability.
1.12 Cash and cash equivalents

Cash and cash equivalents comprise bank balances, cash on hand and deposits held at call with banks.

1.13 Impairment of cash-generating assets
Cash-generating assets are assets managed with the objective of generating a commercial return. An asset
generates a commercial return when it is deployed in a manner consistent with that adopted by a profit-
oriented entity.

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the
systematic recognition of the loss of the asset’s future economic benefits or service potential through
depreciation (amortisation).

Carrying amount is the amount at which an asset is recognised in the statement of financial position after
deducting any accumulated depreciation and accumulated impairment losses thereon.

A cash-generating unit is the smallest identifiable group of assets managed with the objective of generating
a commercial return that generates cash inflows from continuing use that are largely independent of the
cash inflows from other assets or groups of assets.

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance
costs and income tax expense.

Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its
useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction
between knowledgeable, willing parties, less the costs of disposal.

Recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and
its value in use.

Useful life is either:
(a) the period of time over which an asset is expected to be used by the entity; or
(b) the number of production or similar units expected to be obtained from the asset by the entity.

SAMRC ANNUAL REPOR T 2023-24 241