Page 246 - SAMRC Annual Report 2023-24

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

(CONTINUED)

1.15 Employee benefits (continued)
A qualifying insurance policy is an insurance policy issued by an insurer that is not a related party (as
defined in the Standard of GRAP on Related Party Disclosures) of the reporting entity, if the proceeds of
the policy can be used only to pay or fund employee benefits under a defined benefit plan and are not
available to the reporting entity’s own creditors (even in liquidation) and cannot be paid to the reporting
entity, unless either:
• the proceeds represent surplus assets that are not needed for the policy to meet all the related
employee benefit obligations; or
• the proceeds are returned to the reporting entity to reimburse it for employee benefits already paid.

Termination benefits are employee benefits payable as a result of either:
• an entity’s decision to terminate an employee’s employment before the normal retirement date; or
• an employee’s decision to accept voluntary redundancy in exchange for those benefits.

Short-term employee benefits
Short-term employee benefits are employee benefits (other than termination benefits) that are due to be
settled within twelve months after the end of the period in which the employees render the related service.

When an employee has rendered service to the entity during a reporting period, the entity recognises the
undiscounted amount of short-term employee benefits expected to be paid in exchange for that service:
• as a liability (accrued expense), after deducting any amount already paid. If the amount already paid
exceeds the undiscounted amount of the benefits, the entity recognises that excess as an asset (prepaid
expense) to the extent that the prepayment will lead to, for example, a reduction in future payments
or a cash refund.

The expected cost of compensated absences is recognised as an expense as the employees render services
that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The
entity measures the expected cost of accumulating compensated absences as the additional amount that
the entity expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The entity recognises the expected cost of bonus, incentive and performance related payments when the
entity has a present legal or constructive obligation to make such payments as a result of past events and a
reliable estimate of the obligation can be made. A present obligation exists when the entity has no realistic
alternative but to make the payments.

Post-employment benefits
Post-employment benefits are employee benefits (other than termination benefits) which are payable after
the completion of employment.

SAMRC offers its employees post-employee benefits to the SAMRC Pension Fund.

Post-employment benefits: Defined contribution plans
Defined contribution plans are post-employment benefit plans under which an entity pays fixed
contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further
contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee
service in the current and prior periods.

244 SAMRC ANNUAL REPOR T 2023-24