ACCOUNTING POLICY
1 . BASIS OF PRESENTATION
SENWES ANNUAL FINANCIAL STATEMENTS 2022
The financial statements are prepared on the historical cost basis , except for derivative financial instruments , financial assets and commodity inventory measured at fair value . The carrying values of designated hedged assets and liabilities are adjusted to reflect changes in the fair values resulting from the hedged risks . The financial statements are presented in South African rand terms and all values are rounded to the nearest million ( R ’ m ), except where stated otherwise .
1.1 Statement of compliance The financial statements of Senwes and all its subsidiaries , joint ventures and associates ( group ) have been prepared in accordance and in compliance with the requirements of International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ), and Interpretations issued by the International Financial Reporting Interpretation Committee ( IFRIC ) and with those requirements of the South African Companies Act , no 71 of 2008 ( as amended ), applicable to companies reporting under IFRS .
1.2 Change in accounting policy and disclosures The accounting policy adopted in the preparation of the consolidated financial statements is consistent with the policy followed in the preparation of the group ’ s annual financial statements for the previous financial year . No new standards have been adopted during the current financial year .
1.3 New standards , interpretations and amendments
New interpretations and amendments to standards adopted during the current financial year :
• IFRS 16 ( Amendments ) Covid-19- Related Rent Concessions This amendment provides a practical expedient that a lessee can use to elect not to assess whether a rent concession that occurs as a direct consequence of the Covid-19 pandemic represents a lease modification . Effective from 1 June 2020 with early adoption available .
Standards already issued , but not yet effective upon the issuing of the group ’ s financial statements , are listed below . This list contains standards and interpretations issued , which are expected to be applicable at a future date . The intention of the group is to adopt these standards , if applicable , when they become effective :
• IFRS 10 and IAS 28 ( Amendments ) Sale / Contribution of Assets between Investor and its Associate / Joint Venture Clarification of the accounting treatment when an investor loses control over a subsidiary as a result of a transaction with a joint venture or associate . No date for implementation set yet ;
• IAS 1 ( Amendments ) Classification of Liabilities as current or non-current Previously , IAS 1 required that an entity must have an unconditional right to defer payment , but also required expectation of refinancing / roll-over of obligations to be taken into account in classifying a liability as current or non-current . These requirements were potentially contradictory . The standard is amended to now require that a liability must be classified based on an entity ' s right to defer payment that exists at the reporting date , irrespective of whether the entity expects to exercise that right or not . If the right to defer payment is conditional , the entity must meet the conditions at the reporting date ( even if a lender will not test compliance on this date ) to take such a right into account . Effective from 1 January 2023 ;
• IFRS 9 ( Amendments ) Financial instruments ( Annual improvements 2018 - 2020 ) Clarification that for purposes of determining whether a financial liability has been modified , the fees to be considered are those between the borrower and lender . The amendment provides clarity on the accounting treatment of fees if the modification is not accounted for as an extinguishment . Effective from 1 January 2022 ;
• IAS 37 ( Amendments ) Onerous Contracts - Cost of Fulfilling a Contract Amendment clarifies that the cost of fulfilling a contract , as contemplated in the definition of an onerous contract , refers to costs directly attributable to the contract . This includes incremental costs of fulfilling the contract and also an allocation of other costs that relate directly to fulfilling the contract . The amendment also clarifies that impairment testing should be performed on assets used in fulfilling the contract . Effective from 1 January 2022 ;
• IFRS 3 ( Amendments ) Reference to the Conceptual Framework Reference to the Framework updated in the recognition criteria in IFRS 3 with two consequent amendments . Firstly , the amendments indicate that contingent assets acquired in a business combination are not recognised . Secondly , the amendments indicate that an entity should apply the requirement of IAS 37 ( and IFRIC 21 ), as opposed to the Framework , to determine whether liabilities within the scope of that standard are recognised in a business combination . Effective from 1 January 2022 ;
Reimagine Agriculture
69