Page 276 - SAMRC Annual Report 2024-2025

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

1.6 Intangible assets (continued)

Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual
values. The estimated useful lives for current and comparative periods are as follows:

ITEM DEPRECIATION METHOD AVERAGE USEFUL LIFE
Computer software Straight line 3 – 10 years

Intangible assets are derecognised:
• on disposal; or
• when no future economic benefits or service potential are expected from its use or disposal.

The gain or loss arising from the derecognition of intangible assets is included in surplus or deficit when the
asset is derecognised (unless the Standard of GRAP on leases requires otherwise on a sale and leaseback).
1.7 Investments in controlled entities

Investments in controlled entities are carried at cost less any accumulated impairment. The financial
statements of the entity is not consolidated with those of the controlled entities, as the entities have had
no trading activities and they are not material.
1.8 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or a residual interest of another entity.
A concessionary loan is a loan granted to or received by an entity on terms that are not market related.

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party
by failing to discharge an obligation.

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
Derecognition is the removal of a previously recognised financial asset or financial liability from an
entity’s statement of financial position.
The effective interest method is a method of calculating the amortised cost of a financial asset or a
financial liability (or group of financial assets or financial liabilities) and of allocating the interest income
or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments or receipts through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When
calculating the effective interest rate, an entity shall estimate cash flows considering all contractual terms
of the financial instrument (for example, prepayment, call and similar options) but shall not consider
future credit losses. The calculation includes all fees and amounts paid or received between parties
to the contract that are an integral part of the effective interest rate, transaction costs, and all other
premiums or discounts. There is a presumption that the cash flows and the expected life of a group
of similar financial instruments can be estimated reliably. However, in those rare cases when it is not
possible to reliably estimate the cash flows or the expected life of a financial instrument (or group of
financial instruments), the entity shall use the contractual cash flows over the full contractual term of the
financial instrument (or group of financial instruments).
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable willing parties in an arm’s length transaction.

274 SAMRC ANNUAL REPOR T 2025-26