AGRIBEL HOLDINGS LTD FINANCIAL REVIEW 2021
Contingent liabilities Contingent liabilities are potential obligations arising from past events , the existence of which will only be confirmed upon the occurrence or non-occurrence of one or more uncertain future events beyond the control of the business .
Contingent liabilities may also arise from a current obligation arising from past events but are not recognised because :
It is improbable that an outflow of economic resources will occur ; and / or The amount cannot be measured or estimated reliably .
Contingent liabilities are not recognised but are merely disclosed by way of a note in the financial statements ( See note 21 ).
2.19 Non-current assets held-for-sale and discontinued operations A discontinued operation is a component of an entity which has been sold or classified as held-for-sale and :
Represents a separate important business component or geographical area of activities ; Forms part of a single co-ordinated plan to sell a separate important business segment or geographical area of activities ; or Is a subsidiary acquired with the sole purpose of selling it .
An item is classified as held-for-sale if the carrying amount of such item will largely be recovered through a transaction of sale rather than through continued use . Non-current assets and disposal groups classified as held-for-sale are measured at the lower of their carrying value and fair value less cost to sell . In the statement of comprehensive income , the after tax profit or loss is reported separately from profit or loss from continuing operations . Property , plant and equipment , once classified as held-for-sale , are not depreciated .
2.20 Treasury shares Own equity instruments that are reacquired are recognised at cost and deducted from equity . No gain or loss is recognised in profit or loss on the purchase , sale , issue or cancellation of the group ’ s own equity instruments . Any difference between the carrying amount and the consideration , if reissued , is recognised in equity .
2.21 Operating leases Leases in respect of property , plant and equipment , where substantially all the risks and rewards attached to property rights to an asset are retained by the lessor , are classified as operating leases . Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease . Future escalations in terms of the lease agreement are calculated and the average lease expenditure is recognised over the lease period in equal amounts , only if a fixed escalation rate has been agreed to contractually .
The preparation of the group ’ s consolidated financial statements requires management to make judgments , estimates and assumptions that affect the reporting amounts of revenues , expenses , assets and liabilities , and the disclosure of contingent liabilities at the reporting date . However , uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods .
Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date , that have a significant risk of causing a material adjustment to the carrying amounts of income and expenses , assets and liabilities within the next financial year , are discussed below .
Agribel Holdings Limited Reg nr : 1996 / 017629 / 06 AGRIBEL ANNUAL FINANCIAL REVIEW 2021
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