Page 282 - SAMRC AnnualReport 2025-26

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
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

Applied for the year ended 31 Mach 2026, being the first year of adoption. The revised standard is
effective for annual periods beginning on or after 1 April 2025 as prescribed by the Minister of Finance
and Directive 5. Any references to paragraph numbers in this accounting policy relates to paragraphs in
GRAP 104 (revised 2019), relating Appendices or relating Basis for Conclusions.

Definitions
Residual interests represent a claim on the entity’s net assets after deducting all liabilities and include
contributions from owners, equity instruments such as shares, or formal arrangements establishing an
interest in the net assets of the entity.

The amortised cost of a financial asset or liability is the amount at which it is measured initially, minus
principal repayments, plus or minus cumulative amortisation using the effective-interest rate method,
and less any loss allowance.
12 month expected credit losses is the portion of lifetime expected credit losses that represent the
expected credit losses that result from default events on a financial instrument that are possible within
the 12 months after the reporting date.

Credit-adjusted effective interest rate is the rate that exactly discounts the estimated future cash payments
or receipts through the expected life of the financial asset to the amortised cost of a financial asset that is
a purchased or originated credit-impaired financial asset. When calculating the credit-adjusted effective
interest rate, an entity shall estimate the expected cash flows by considering all contractual terms of the
financial asset (for example, prepayment, extension, call and similar options) and expected credit losses.
The calculation includes all fees and points 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 remaining 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).

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