RTIA Annual Report E-Book

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

Prepayments

Derecognition

Prepayments are amounts paid in advance for a benefit not yet received. This type of expenses normally includes costs paid in one fiscal year that benefits a future year (period).A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or a residual interest of another entity. Payables from exchange transactions The entity measures all financial assets and financial liabilities after initial recognition using the following categories: Financial instruments at fair value and/or amortised cost. Payables from exchange transactions are initially measured at fair value. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash with the bank. Cash equivalents relate to short term highly liquid investments that are registered with banking institutions with maturities of 3 months or less and are subject to an insignificant risk of change in value. Offsetting Assets and liabilities, revenue and expenses are not permitted to be offset but rather reported separately. Offsetting for RTIA in only in respect of the AARTO assets and liabilities where the substance of the transaction is reflected.

Assets are derecognised upon disposal or when it is evident that no future economic benefits or service potential are expected from its use or disposal. The carrying amount of the assets is the portion that is derecognised. Financial assets Offsetting is only allowed if RTIA has the intention to settle on a net basis and has a legally enforceable right to set off the amounts. Financial liabilities Offsetting is only allowed if RTIA has the intention to settle on a net basis and has a legally enforceable right to set off the amounts. The amortised cost of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, and minus any reduction (directly or through the use of an allowance account) for impairment or uncollectability. 1.7 Taxation The RTIA is exempt from taxation in terms of the provision of section 10 (1) (cA) (i) of the Income Tax Act, 1962 (Act No. 58 of 1962) and the Value-Added Tax Act, 1991 (Act No. 89 of 1991). The

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Road Traffic Infringement Agency • Annual Report 2023/24