Page 121 - 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)
1.15 Pension obligations
The University operates defined contribution and defined benefit (National Tertiary Retirement Fund) pension schemes in accordance with the Pension Funds Act, 1956. The assets of both schemes are held separately from those of the University and are administered, in the case of the defined benefit plan by trustees of the Fund and in the case of the defined contribution plan by the insurance company selected by the trustees of the Fund.
The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit credit method. Under this method the cost of providing pensions is charged to surplus or deficit.
The pension obligation is measured at the present value of the estimated future cash outflows using interest rates of government securities that have terms to maturity approximating the terms of the related liability. The net difference between the expected return on plan assets and the interest factor arising from discounting the obligation is recognised under personnel costs. The obligation is valued annually by independent qualified actuaries. Actuarial gains and losses are recognised immediately in other comprehensive income.
1.16 Post-retirement medical aid benefits
The University provides post-retirement medical aid benefits to certain of its employees. The expected costs of these benefits are accrued over the period of employment, using an accounting methodology similar to that of defined benefit pension plans. These obligations are valued annually by independent qualified actuaries. Actuarial gains and losses are recognised immediately in other comprehensive income.
The interest factor arising from discounting the obligation is recognised under personnel costs. The obligation is valued annually by independent qualified actuaries. Actuarial gains and losses are recognised immediately in other comprehensive income.
1.17 Revenue recognition
Revenue is measured based on the consideration specified in a contract with a customer and revenue is recognised in terms of:
  
a) b)
IAS 20 when the terms and conditions of the transaction are met.
IFRS 15 the performance obligations of the contract have been met under IFRS 15.
IFRS 15 recognizes revenue over time as well as allocation of transaction prices based the various performance obligations. This reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.
This standard also requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying the five-step model to contracts with their customers.
IFRS 15 specifies the accounting for the incremental costs of gaining a contract and the costs directly related to fulfilling a contract.
DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
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