Page 302 - SAMRC AnnualReport 2025-26

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

1.16 Employee benefits (continued)

The amount recognised as a defined benefit liability is the net total of the following amounts:
• the present value of the defined benefit obligation at the reporting date;
• minus the fair value at the reporting date of plan assets (if any) out of which the obligations are to be
settled directly;
• plus any liability that may arise as a result of a minimum funding requirement.
The amount determined as a defined benefit liability may be negative (an asset). The entity measures
the resulting asset at the lower of:
• the amount determined above; and
• the present value of any economic benefits available in the form of refunds from the plan or reductions
in future contributions to the plan. The present value of these economic benefits is determined using
a discount rate which reflects the time value of money.

Any adjustments arising from the limit above is recognised in surplus or deficit.

The entity determines the present value of defined benefit obligations and the fair value of any plan
assets with sufficient regularity such that the amounts recognised in the annual financial statements do
not differ materially from the amounts that would be determined at the reporting date.

The entity recognises the net total of the following amounts in surplus or deficit, except to the extent
that another Standard requires or permits their inclusion in the cost of an asset:
• current service cost;
• interest cost;
• the expected return on any plan assets and on any reimbursement rights;
• actuarial gains and losses;
• past service cost;
• the effect of any curtailments or settlements; and
• the effect of applying the limit on a defined benefit asset (negative defined benefit liability).
The entity uses the Projected Unit Credit Method to determine the present value of its defined benefit
obligations and the related current service cost and, where applicable, past service cost. The Projected
Unit Credit Method (sometimes known as the accrued benefit method pro-rated on service or as the
benefit/years of service method) sees each period of service as giving rise to an additional unit of benefit
entitlement and measures each unit separately to build up the final obligation.

Actuarial valuations for GRAP 25 purposes are conducted on an annual basis by independent actuaries
separately for each plan. The results of the valuation are updated for any material transactions and other
material changes in circumstances (including changes in market prices and interest rates) up to the
reporting date.

The entity recognises gains or losses on the curtailment or settlement of a defined benefit plan when the
curtailment or settlement occurs. The gain or loss on a curtailment or settlement comprises:
• any resulting change in the present value of the defined benefit obligation; and
• any resulting change in the fair value of the plan assets.

Before determining the effect of a curtailment or settlement, the entity re-measures the obligation (and
the related plan assets, if any) using current actuarial assumptions (including current market interest rates
and other current market prices).

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