Page 77 - English

Accounts payable and accruals
Considering the short-term nature of these liabilities, accounts payable and accruals are recognised for amounts to be paid in the future for goods
or services received without discounting, whether billed by the supplier or not.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender
on substantially different terms,
or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts
is recognised in the statement of comprehensive income.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the
net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Impairment of financial assets
The Regulatory Authority assesses, at each reporting date, whether there is any objective evidence that a financial asset or a group
of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred ‘loss event’), has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency
in interest or principal payments,
the probability that they will enter bankruptcy or other financial reorganization and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. The Regulatory Authority determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings
and payables, net of directly attributable transaction costs.
The Regulatory Authority’s financial liabilities include trade payables and refunds
to customers.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as described below:
Impairment of non-financial assets
The Regulatory Authority assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset
is required, The Regulatory Authority estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of
an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used.
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