Page 293 - SAMRC Annual Report 2024-2025

FINANCIAL INFORMATION

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

(CONTINUED)

1.20 Revenue recognition for exchange and non-exchange
transactions (continued)

Revenue other than grants, donations, project revenue and council
activities (Revenue from exchange transactions)
Revenue is recognised on the accrual basis. Revenue is recognised when significant risks and rewards of
ownership have been transferred.

Research revenue
Revenue is recognised only to the extent of research costs incurred and is probable that it will be
recoverable. Advance income received in respect of which no work has been done, is treated as deferred
income until such time the expenditure is incurred or the conditions of the grant/contract are met.

Rental income
Rental income from tenants is recognised in the statement of financial performance on a straight line
basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total
rental income, over the term of the lease.

Deferred income
Deferred income is recognised as revenue to the extent that expenses are incurred and that conditions
of the grant are met.

Social outcomes based contracts
Income received from the social investor is recognised in the statement of financial performance when
all the contractual commitments are met.
A liability will be recognised once the social outcomes have been verified by the verification agent.
1.21 Borrowing costs

Borrowing costs are interest and other expenses incurred by an entity in connection with the borrowing
of funds.
Borrowing costs are recognised as an expense in the period in which they are incurred.
1.22 Accounting by principals and agents

Identification
An agent is an entity that has been directed by another entity (a principal), through a binding arrangement,
to undertake transactions with third parties on behalf of the principal and for the benefit of the principal.

A principal is an entity that directs another entity (an agent), through a binding arrangement, to undertake
transactions with third parties on its behalf and for its own benefit.

A principal-agent arrangement results from a binding arrangement in which one entity (an agent),
undertakes transactions with third parties on behalf, and for the benefit of, another entity (the principal).

Identifying whether an entity is a principal or an agent
When the entity is party to a principal-agent arrangement, it assesses whether it is the principal or the
agent in accounting for revenue, expenses, assets and/or liabilities that result from transactions with
third parties undertaken in terms of the arrangement.

SAMRC ANNUAL REPOR T 2025-26 291