SACAA Annual Report 2022_23

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Accounting Policies Annual Financial Statements for the year ended 31 March 2023

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The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The SACAA measures the expected cost of accumulating compensated absences as the additional amount that the SACAA expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The SACAA recognise the expected cost of bonus, incentive and performance related payments when the SACAA has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the SACAA has no realistic alternative but to make the payments. Retirement benefits: Defined contribution plans The SACAA provides retirement benefits for its employees. Defined contribution plans are retirement benefits plans under which the SACAA pays fixed contributions into a separate fund and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. When an employee has rendered service to the SACAA during a reporting period, the SACAA recognises the contribution payable to a defined contribution plan in exchange for that service: • as a liability (accrued expense), after deducting any contribution already paid; and • as an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.

1.10 Employee benefits (continued) Short-term employee benefits Short-term employee benefits are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service. Short-term employee benefits include items such as: • Salaries and social security contributions; • Short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service; • Bonus, incentive and performance-related payments payable within twelve months after the end of the reporting period in which the employees render the related service; and • Non-monetary benefits (for example, medical care, cell phones and employee wellness) for current employees. When an employee has rendered service to the SACAA during a reporting period, the SACAA recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service: • As a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefits, the SACAA recognises that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and • As an expense, unless another Standard requires or permits the inclusion of the benefits in the cost of an asset.

Annual Financial Statements I Annual Report 2022/23 I 195