RTIA Annual Report E-Book

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

Where a binding agreement is not concluded which is the case mainly for the municipalities in which the legislation prevails. The collecting agents provide a payment platform facility to collect all AARTO notices and as such the funds collected are required to be deposited into the AARTO accounts by a legislated timeframe of which all collecting agents are required to conform. Not all collecting agents meet the definition of an agent in terms of the standard, therefore will be excluded from the provisions of this standard. Those collecting agents who do meet the definition will be treated in terms of this standard. 1.2 Provisions Provisions are recognised when: • the entity has a present obligation as a result of a past event; • it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation; and • a reliable estimate can be made of the obligation. The amount of a provision is the present value of the expenditure expected to be required to settle the obligation, which is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation.

A provision is used only for expenditures for which the provision was originally recognised. Provisions are made for unavoidable liabilities of which the amount can be estimated, but the settlement is uncertain. These provisions are recognised when the Agency has a present legal or constructive obligation as a result of past events, for which 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. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation. A provision is reversed to the extent that it is no longer probable that a future outflow of economic benefits will be required to settle the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.

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Road Traffic Infringement Agency • Annual Report 2023/24