CIPC Annual Report V1

Companies and Intellectual Property Commission Annual Financial Statements for the year ended 31 March 2021 Accounting Policies

1.5 Financial instruments

Classification

The classification of financial instruments depends on the purpose for which the financial instruments were obtained and is determined by management at initial recognition.

Financial assets

Cash and cash equivalents Cash and cash equivalents comprise cash balances and deposits with original maturities of three months or less.

Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. They comprise prepayments and receivables from exchange transactions. Subsequent to initial recognition, these are measured at amortised cost using the effective interest rate method, less any impairment loss. The entity classifies it's financial assets as reflected on the face of the statement of financial position as follows:

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Class

Category

Cash and cash equivalents Loans and receivables

Financial asset measured at amortised cost Financial asset measured at amortised cost

Financial liabilities

Payables: Customer deposits

Customer deposits represent payments received from customers for future transactions. Customer deposit balances which have not been utilised for a period of 36 months from the date of the last transaction in that customer account, is recognised as revenue. Trade and other payables Trade and other payables are non-derivative financial liabilities. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method.

The entity classifies its financial liabilities as reflected on the face of the statement of financial position as follows:

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Class

Category

Trade and other payables

Financial liability measured at amortised cost Financial liability measured at amortised cost

Payables from customer deposits

Initial measurement of financial assets and financial liabilities

The entity recognises a financial asset or a financial liability in its statement of financial position when it becomes a party to the contractual provisions of the instrument.

The entity measures a financial asset and financial liability initially at its fair value plus transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

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COMPANIES AND INTELLECTUAL PROPERTY COMMISSION I Annual Report 2020/21

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