Page 119 - DUT Annual Report 2020

DURBAN UNIVERSITY OF TECHNOLOGY
BAN UNIVERSITY OF TECHNOLOGY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
1. ACCOUNTING POLICIES (continued) 1.12 Financial instruments (continued) 1.12.3 Financial liabilities
1.12.3.1. Classification
The University classifies financial liabilities into the following categories:
Financial Instrument
Borrowings
Lease liability
Trade and other payables
Subsequent measurement
Classification under IFRS 9
Amortised cost Amortised cost Amortised cost
The University’s financial liabilities are subsequently measured at amortised cost using the effective interest rate method.
Gains and losses are recognised in net surplus or deficit when the liabilities are de-recognised as well as through the amortisation process.
Financial liabilities comprise trade and other payables, student deposits and accrued liabilities, lease liabilities and borrowings.
1.12.3.2 Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency, translated at the spot rate at the end of the reporting period, and recognised in net surplus or deficit.
1.13. De-recognition of financial assets and liabilities 1.13.1 Financial assets
The University derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the University neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the University recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the University retains substantially all the risks and rewards of ownership of a transferred financial asset, the University continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
When the University has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the University continues to recognise the transferred asset to the extent of the University’s continuing involvement. In that case, the University also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the University has retained.
DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
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