Download the Annual report 2011 - Unisa

2.10.2 Operating leases
UNISA ANNUAL REPORT 2011
Operating lease payments are recognised in profit or loss on a straight-line basis over the lease term. In negotiating
a new or renewed operating lease, the lessor may provide incentives for the University to enter into
the agreement, such as up-front cash payments or an initial rent-free period. These benefits are recognised as
a reduction in the rental expense over the lease term on a straight-line basis.
2.11 PROVISIONS
Provisions are recognised when the University has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are determined by
discounting the expected future cash flows rate that reflects current market assessments of the time value of
money and, where appropriate, the risks specific to the liability.
2.12 FINANCIAL INSTRUMENTS
Non-derivative financial instruments comprise investments in equity and debt securities, student and other
receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
2.12.1 Measurement
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value
through profit or loss, directly attributable transaction costs, for financial instruments through profit and loss,
attributable costs. Subsequent to initial recognition non-derivative financial instruments are measured as described
below.
2.12.2 Interest-bearing borrowings
Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective
interest method, less any impairment losses.
2.12.3 Student and other receivables
Student and other receivables are subsequently classified as loans and receivables and measured at amortised
cost using the effective interest method less any impairment losses.
2.12.4 Cash and cash equivalents
Cash and cash equivalents are measured at amortised cost, using the effective interest method. For the purpose
of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held on call with
banks, and investments in money market instruments, net of bank overdrafts, all of which are available for use
by the University unless otherwise stated. Bank overdrafts that are repayable on demand and form an integral
part of the University’s cash management are included as a component of cash and cash equivalents for the
purpose of the statement of cash flows.
2.12.5 Trade and other payables
Trade and other payables are liabilities to pay for goods or services that have been received or supplied and
have been invoiced or formally agreed with the supplier. Trade payables are subsequently carried at amortised
cost using the effective interest method, less any impairment losses.
2.12.6 Loans and receivables
Loans and receivables are stated at amortised cost, less any impairment losses. Amortised cost represents the
original invoice amount less principal repayments received, the impact of discounting to net present value and
impairment adjustments, where applicable.
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