RAND WATER PROVIDENT FUND ANNUAL REPORT 2022-2023

SCHEDULE HA NOTES TO THE FINANCIAL STATEMENTS For the period ended 30 June 2023 PRINCIPAL ACCOUNTING POLICIES The following are the principal accounting policies used by the fund. These policies have been applied consistently to all years presented, unless otherwise specifically stated. Purpose and basis of preparation of financial statements The financial statements are prepared in accordance with the Regulatory Reporting Requirements for Retirement Funds in South Africa, the rules of the fund and the provisions of the Pension Funds Act. The financial statements are prepared on the historical cost and going concern bases except where specifically indicated otherwise in the accounting policies below: Financial instruments A financial instrument is a contract that gives rise to both a financial asset of an entity and a financial liability or equity instruments of another entity. A financial asset or a liability is recognised when its contractual arrangements becomes binding. A financial instrument is recognised when the Fund becomes a party to the contractual provisions of the instrument. Financial instruments are initially measured at fair value plus directly attributable transaction costs other than those classified at fair value through the Statement of Changes in Net Assets and Funds. Gains or losses arising from changes in the fair value are presented in the Statement of Changes in Net Assets and Funds in the period in which they arise. Financial instruments include financial assets, loans and receivables and other financial liabilities. Financial assets at fair value through Statement of Changes in Net Assets and Funds. • Insurance Policies Loans and receivables • Cash at bank • Accounts receivable Other financial liabilities • Accounts payable Subsequent to initial recognition, financial instruments are measured on the basis set out below: Insurance Policy Linked policies If the policy is unitised, the value is equal to the market value of the underlying units. Other linked or market-related policies are valued at the market value of the underlying assets for each policy, in line with the insurer’s valuation practices.

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