Senwesbel Consolidated Financial Statements | Page 102

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: l It is improbable that an outflow of economic resources will occur; and/or l 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: l Represents a separate important business component or geographical area of activities; l Forms part of a single co-ordinated plan to sell a separate important business segment or geographical area of activities; or l 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. 101 SENWESBEL ANNUAL FINANCIAL STATEMENTS 2020 Senwesbel Limited Reg no: 1996/017629/06