Page 289 - SAMRC AnnualReport 2025-26

F I NAN C IAL I N F O R MA T I O N

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

1.8 Financial instruments (continued)

Determining significant increases in credit risk
At each reporting date, the entity assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, the entity uses the change in the
risk of a default occurring over the expected life of the financial instrument instead of the change in the
amount of expected credit losses. To make that assessment, the entity compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on
the financial instrument as at the date of initial recognition and consider reasonable and supportable
information, that is available without undue cost or effort, that is indicative of significant increases in
credit risk since initial recognition.

Simplified approach for receivables and lease receivables
Despite paragraphs 5.18 and 5.20, the entity always measures the loss allowance at an amount equal to
lifetime expected credit losses for receivables and lease receivables.

The requirements for purchased or originated credit impaired financial assets do not apply to receivables.
The entity has elected the simplified approach for all trade debtors. No staging is required. The expected
credit loss is determined by assessing all its debtors individually as the book is not large.

Measurement of expected credit losses
The entity measures expected credit losses of a financial instrument in a way that reflects:

(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible
outcomes;

(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the reporting
date about past events, current conditions and forecasts of future economic conditions.

Write-off policy
A financial asset is written-off when there is no reasonable expectation of recovery following exhaustive
collection efforts. Write-offs are approved by the delegated official and are recognised by debiting the
loss allowance and crediting the gross carrying amount of the financial asset. Amounts subsequently
recovered are recognised in surplus or deficit.

SA M R C A N N U A L R EP O R T 2 0 2 5 / 2 0 2 6 287