Page 114 - TKZN Annual Report 2023/2024

KWAZULU-NATAL TOURISM AUTHORITY
Trading as Tourism KwaZulu-Natal
Annual Financial Statements for the year ended 31 March 2024
Significant Accounting Policies
1.9 Employee benefits (continued)
Post-employment benefits: Defined contribution plans
Recognition and measurement
When an employee has rendered service to the entity during a reporting period, the entity recognises the contribution payable to a defined contribution plan in exchange for that service:
(a) as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the end of the reporting period, the entity 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
(b) as an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.
Other long-term employee benefits
Recognition and measurement
Other long-term employee benefits are employee benefits (other than post-retirement benefits and termination benefits) that are not due to be settled within twelve months after the end of the period in which the employees render the related service.
Other long-term benefits include the long service award. The entity provides a long service award to its employees, who have been in service for an unbroken period of 10,15 & 20 years.
The long service award is subject to a certain degree of uncertainty and the entity uses the services of actuaries to measure the long service liabilty.
Termination benefits
Measurement
The entity measures termination benefits on initial recognition, and measures and recognise subsequent changes, in accordance with the nature of the employee benefit, provided that if the termination benefits are an enhancement to post- employment benefits, the entity applies the requirements for post-employment benefits. Otherwise:
(a) If the termination benefits are expected to be settled wholly before twelve months after the end of the reporting period in which the termination benefit is recognised, the entity applies the requirements for short-term employee benefits.
(b) If the termination benefits are not expected to be settled wholly before twelve months after the end of the reporting period, the entity applies the requirements for other long-term employee benefits.
1.10 Provisions and contingencies
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 best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.
Where the effect of 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.
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.
112 TOURISM KWAZULU-NATAL ANNUAL REPORT 2023/2024