SBN HOLDINGS LIMITED Annual Report 2022
ANNEXURE D - DETAILED ACCOUNTING POLICIES continued
162
4.
Fair value continued
Portfolio valuations
The group has elected the portfolio exception to measure the fair value of certain groups of financial assets and financial
liabilities. This exception permits the group of financial assets and financial liabilities to be measured at fair value on a net
basis, with the net fair value being allocated to the financial assets and financial liabilities.
Day one profit or loss
For financial instruments, where the fair value of the financial instrument differs from the transaction price, the difference is
commonly referred to as day one profit or loss. Day one profit or loss is recognised in profit or loss immediately where the fair
value of the financial instrument is either evidenced by comparison with other observable current market transactions in the
same instrument, or is determined using valuation models with only observable market data as inputs.
Day one profit or loss is deferred where the fair value of the financial instrument is not able to be evidenced by comparison
with other observable current market transactions in the same instrument, or is determined using valuation models that utilise
non-observable market data as inputs.
The timing of the recognition of deferred day one profit or loss is determined individually depending on the nature of the
instrument and availability of market observable inputs. It is either amortised over the life of the transaction, deferred until the
instrument's fair value can be determined using market observable inputs, or realised through settlement.
5.
Employee benefits
Employee benefits
Defined contribution plans
Defined benefit plans
Employee benefits
Short-term benefits
SBN HOLDINGS LIMITED
Annual report 2022
Type and description
Defined contribution plans
The group operates a number
of defined contribution plans.
See note 34 for more
information.
Defined benefit plans
The group operates a number
of defined benefit retirement
and post-employment medical
aid plans. Employer companies
contribute to the cost of
benefits taking account of
the recommendations of the
actuaries.
See note 34 for more
information.
Short-term benefits
Short-term benefits consist
of salaries, accumulated
leave payments, profit share,
bonuses and any non-monetary
benefits such as medical aid
contributions.
Statement of financial
position
Accruals are recognised
for unpaid contributions.
Assets or liabilities
measured at the present
value of the estimated
future cash outflows,
using interest rates
of government bonds
denominated in the same
currency as the defined
benefit plan (corporate
bonds are used for
currencies for which there
is a deep market of high-
quality corporate bonds),
with maturity dates
that approximate the
expected maturity of the
obligations, less the fair
value of plan assets.
A net defined benefit asset
is only recognised to the
extent that economic
benefits are available to
the group from reductions
in future contributions or
future refunds from the
plan.
A liability is recognised
for the amount expected
to be paid under short-
term cash bonus plans or
accumulated leave if the
group has a present legal
or constructive obligation
to pay this amount as
a result of past service
provided by the employee
and the obligation can be
estimated reliably.
Statement of other
comprehensive income
No direct impact.
Remeasurements of
the net defined benefit
obligation, including
actuarial gains and
losses, the return on plan
assets (excluding interest
calculated) and the effect
of any asset ceiling are
recognised within OCI.
No direct impact.
Income statement
Contributions are
recognised as an operating
expense in the periods
during which services
are rendered by the
employees.
Net interest income/
(expense) is determined
on the defined benefit
asset/(liability) by applying
the discount rate used
to measure the defined
benefit obligation at the
beginning of the annual
period to the net defined.
benefit asset/(liability).
Other expenses related to
the defined benefit plans
are also recognised in
operating expenses.
When the benefits of a
plan are changed or when
a plan is curtailed, the
resulting change in benefit
that relates to past service
or the gain or loss on
curtailment is recognised
immediately in operating
expenses.
The group recognises
gains and losses on the
settlement of a defined
benefit plan when the
settlement occurs.
Short-term employee
benefit obligations
are measured on an
undiscounted basis and
are expensed in operating
expenses as the related
service is provided.
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