Page 297 - 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)

1.14 Impairment of cash-generating assets

Cash-generating assets are assets used with the objective of generating a commercial return. Commercial
return means that positive cash flows are expected to be significantly higher than the cost of the asset.

Impairment is a loss in the future economic benefits or service potential of an asset, over and above the
systematic recognition of the loss of the asset’s future economic benefits or service potential through
depreciation (amortisation).
Carrying amount is the amount at which an asset is recognised in the statement of financial position after
deducting any accumulated depreciation and accumulated impairment losses thereon.
A cash-generating unit is the smallest identifiable group of assets used with the objective of generating
a commercial return that generates cash inflows from continuing use that are largely independent of the
cash inflows from other assets or groups of assets.

Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding finance
costs and income tax expense.

Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its
useful life.

Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction
between knowledgeable, willing parties, less the costs of disposal.
Recoverable amount of an asset or a cash-generating unit is the higher its fair value less costs to sell and
its value in use.
Useful life is either:

• the period of time over which an asset is expected to be used by the entity; or
• the number of production or similar units expected to be obtained from the asset by the entity.

1.15 Impairment of non-cash-generating assets

Cash-generating assets are assets used with the objective of generating a commercial return. Commercial
return means that positive cash flows are expected to be significantly higher than the cost of the asset.

Non-cash-generating assets are assets other than cash-generating assets.
Impairment is a loss in the future economic benefits or service potential of an asset, over and above the
systematic recognition of the loss of the asset’s future economic benefits or service potential through
depreciation (amortisation).
Carrying amount is the amount at which an asset is recognised in the statement of financial position after
deducting any accumulated depreciation and accumulated impairment losses thereon.
Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its
useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction
between knowledgeable, willing parties, less the costs of disposal.

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