Page 291 - 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)

Derecognition of financial liabilities
The entity removes a financial liability (or a part of a financial liability) from its statement of financial
position when it is extinguished.
An exchange between an existing borrower and lender of debt instruments with substantially different
terms is accounted for as having extinguished the original financial liability, and a new financial liability
recognised. Similarly, a substantial modification of the terms of an existing financial liability or a part
of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as having
extinguished the original financial liability and having recognised a new financial liability.

The difference between the carrying amount of a financial liability (or part of a financial liability)
extinguished or transferred to another party and the consideration paid, including any non-cash assets
transferred or liabilities assumed, is recognised in surplus or deficit. Any liabilities that are waived,
forgiven or assumed by another entity by way of a non-exchange transaction, are accounted for in
accordance with GRAP 23.

If the entity repurchases a part of a financial liability, the entity allocates the previous carrying amount of
the financial liability between the part that continues to be recognised and the part that is derecognised
based on the relative fair values of those parts on the date of the repurchase. The difference between
(a) the carrying amount allocated to the part derecognised and (b) the consideration paid, including any
non-cash assets transferred or liabilities assumed, for the part derecognised is recognised in surplus
or deficit.

1.9 Financial instruments – GRAP 104 (Previous policy applied in
comparative period)
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.

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