AFRICAN DAWN ANNUAL REPORT 2017 44 Accounting Policies continued Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. Financial guarantee contracts Financial guarantee contracts are contracts that protect a creditor from a loss it may incur if a debtor fails to make payments when due in accordance with the terms of a debt instrument. These are accounted for as financial instruments and are initially recognised at fair value, which is usually equal to the premium received, if any. Financial guarantee contracts are subsequently measured at the higher of: • The amount determined in accordance with IAS 37 (refer note 1.13 on provisions); and • The initial fair value less cumulative amortisation in accordance with IAS 18. The group does not issue any financial guarantee contract for a premium. At each reporting date, it considers whether payment under the guarantee contract is probable (more likely than not) for a provision to be recognised under IAS 37. If a provision is recognised, and the provision amount is greater than the existing carrying amount (after amortisation of revenue under IAS 18), an adjustment is required to reflect the provision and recognise the difference in profit or loss. 1.16 Segment reporting The identification of reportable segments and the measurement of segment results are determined based on group’s internal reporting to management as well as a consideration of products and services, organisational structures, geographical areas, economic and regulatory environments and the separable nature of activities or conversely inherent interconnectedness and whether these meet the criteria for aggregation. The group accounts for inter-segment revenues and transfers as if the transactions were with third parties at current market prices. Additional information relating to major clients and other performance measures is provided. The group has four operating segments: * Investment advisory and investment management * Micro finance * Rentals of property in possession * Other All inter-segment transfers are carried out at arm’s length prices based on prices charged to unrelated customers in standalone sales of identical goods or services. For management purposes, the Group uses the same measurement policies as those used in its financial statements. 1.17 Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary equity holders of the Group by the weighted average number of ordinary shares in issue during the year. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary equity holders and the weighted average number of ordinary shares in issue for the effects of all dilutive potential ordinary shares, which comprise convertible notes. 1.18 Significant judgements and sources of estimation uncertainty When preparing the financial statements, management and the board make a number of judgements, estimates and assumptions. The following are the most significant judgements, estimates and assumptions that have been made in preparing the financial statements. Going concern judgement The consolidated and separate financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
AFRICAN DAWN 2017
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