Page 294 - SAMRC Annual Report 2024-2025

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

(CONTINUED)

The assessment of whether an entity is a principal or an agent requires the entity to assess whether the
transactions it undertakes with third parties are for the benefit of another entity or for its own benefit.

Binding arrangement
The entity assesses whether it is an agent or a principal by assessing the rights and obligations of the
various parties established in the binding arrangement.

Where the terms of a binding arrangement are modified, the parties to the arrangement re-assess
whether they act as a principal or an agent.

Recognition
The entity, as an agent, recognises only that portion of the revenue and expenses it receives or incurs in
executing the transactions on behalf of the principal in accordance with the requirements of the relevant
Standards of GRAP.

The entity recognises assets and liabilities arising from principal-agent arrangements in accordance with
the requirements of the relevant Standards of GRAP.

1.23 Translation of foreign currencies

Foreign currency transactions
A foreign currency transaction is recorded, on initial recognition in Rand’s, by applying to the foreign
currency amount the spot exchange rate between the functional currency and the foreign currency at
the date of the transaction.

At each reporting date:
• foreign currency monetary items are translated using the closing rate;
• non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction; and
• non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at
rates different from those at which they were translated on initial recognition during the period or in
previous annual financial statements are recognised in surplus or deficit in the period in which they arise.
When a gain or loss on a non-monetary item is recognised directly in net assets, any exchange component
of that gain or loss is recognised directly in net assets. When a gain or loss on a non-monetary item is
recognised in surplus or deficit, any exchange component of that gain or loss is recognised in surplus
or deficit.
Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the
foreign currency amount the exchange rate between the Rand and the foreign currency at the date of
the cash flow.
1.24 VAT

The SAMRC accounts for VAT on the invoice basis.

The net amount of VAT recoverable, or payable to SARS is reflected on the Statement of Financial Position.

292 SAMRC ANNUAL REPOR T 2025-26