RTIA Annual Report E-Book

Road Traffic Infringement Agency Annual Financial Statements for the year ended 31 March 2024 __________________________________________________________________________________________________________________________________________________________ Significant Accounting Policies

and estimates are reviewed annually by management. Revisions and accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. The following significant areas of judgements and sources of estimation uncertainty were used during the current or prior financial period: Impairment testing Key assumptions, judgements and/or estimates are used with regards to impairment of property, plant and equipment: Property, plant and equipment and intangible assets are considered for impairment if there is reason to believe that impairment may be necessary. Factors taken into consideration in reaching such a decision include economic viability of the asset, where the component is situated in a larger economic unit and the viability of the unit itself. Future cashflows expected to be generated by the asset are projected, taking into account market conditions and the expected useful lives of the assets. The present value of these cash flows, determined using appropriate discount rates, is compared to the current net asset value and if lower, the assets are impaired to the present value. Provisions Provisions were raised and management determined an estimate based on the information available. Employees entitlement to annual leave is recognised when it accrues from 1 January to 31 December which will be forfeited

on the 30 June of the following year. A provision is raised on the estimated liability for annual leave arising from the obligation to honour the services rendered by employees at reporting date. A provision is raised on the estimated liability for annual leave arising from the obligation to honour the services rendered by employees at the reporting date. The leave pay provision is calculated based on the actual days accrued at the rate of remuneration set according to the approved policy of the Agency. Any changes in the rate of remuneration are determined on an annual basis. According to the Agency’s policy, employees can accrue annual leave in excess of 15 working days. However, any excess leave that is not taken within six months after the leave cycle will be forfeited unless the employee can demonstrate that operational requirements prevented them from taking the leave. Leave that is not taken will not be compensated unless the employee’s contract of employment is terminated. In this case, timing is certain (within six months after the annual leave cycle has expired), but the amount may be uncertain (i.e. an estimate of the leave that will be forfeited should be made in measuring the liability). Management will use its judgement in deciding whether the uncertainty is more or less in measuring the liability. The bonus provision is based on the approved estimates in terms of the Performance Management Framework of the Agency. The provision becomes due and payable provided the performance bonus qualification criteria is met, subject to the performance measurement assessments or at the discretion of the Board based on the outcome of the

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Road Traffic Infringement Agency • Annual Report 2023/24