AFRICAN DAWN ANNUAL REPORT 2017 41 Accounting Policies continued Rendering of services The Group generates revenues from consulting and advisory services. Consideration received for these services is initially deferred, included in other liabilities, and is recognised as revenue in the period when the service is performed. The Group determines the stage of completion by considering both the nature and timing of the services provided and its customer’s pattern of consumption of those services, based on historical experience. Where the promised services are characterised by an indeterminate number of acts over a specified period of time, revenue is recognised on a straight- line basis. Revenue from consulting services is recognised when the services are provided by reference to the contract’s stage of completion at the reporting date using percentage complete method. Rental income The Group earns rental income from properties in possession. Rental income is recognised on a straight-line basis over the term of the lease. Investment income Investment income relates to interest earned on cash and cash equivalents and is recognised on the same basis as interest income as outlined above. Dividend income Dividend income is recognised when the right to receive payment is established on the ex-dividend date for equity instruments and is included in dividend income under non-interest revenue. Dividend income is recognised separately from other fair value movements. 1.15 Financial instruments Financial instruments, as reflected on the statement of financial position, include all financial assets, financial liabilities, and equity instruments. They exclude prepayments, deferred income, investments in subsidiaries, investments in associates, property and equipment, deferred taxation, taxation receivable / payable, provisions, intangible assets and goodwill. Financial instruments are accounted for under IAS 32 - Financial Instruments: Presentation and IAS 39 - Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures. The Group has the following financial instruments: • Other financial assets • Loans to group companies • Trade receivables • Other receivables • Cash and cash equivalents • Borrowings • Loans from group companies • Loans from directors • Trade payables • Other payables All disclosures required by IFRS 7 can be found in note 35. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Cash and cash equivalents are stated at cost which approximates fair value due to the short-term nature of these instruments. Financial liabilities A financial liability (or group of financial liabilities) or a part of a financial liability (or part of a group of financial liabilities) is derecognised when and only when the liability is extinguished, i.e. when the obligation specified in the contract is discharged, cancelled or expires.
AFRICAN DAWN 2017
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