Page 271 - SAMRC Annual Report 2024-2025

FINANCIAL INFORMATION

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
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 2025-26 269