Page 50 - SABN AR 2021

1.11
Entitlement to these benefits is based on employment having commenced prior to a certain date and is conditional on employees remaining in the Company’s service up to retirement age. 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.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Past-service costs are recognised immediately in profit or loss, to the extent that they relate to retired employees or past service.
The liability is provided for in an actuarially determined provision.
Short-term employee benefits
Short-term employee benefits, including leave entitlement, are current liabilities included in pension and other employee obligations. These benefits are measured at the undiscounted amount that the SABN expects to pay as a result of the unused entitlement.
Provisions and staff accruals
Provisions are recognised when the SABN has a present legal or constructive obligation as a result of past events for which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
Provisions are measured by management at the present value of the best estimate of the expenditure required to settle the present obligation, using a pre-taxation rate of the time value of money and risks specific to the obligation.
Employee entitlements to annual leave and long-service leave are recognised when they accrue to employees. The provision for leave pay, bonuses, long-service awards, overtime and standby allowances represents the present obligation to employees as a result of employees’ services provided up to the statement of financial position date.
1.12 Revenue
Revenue from contracts with customers
The SABN is a banknote and security printing company that produces banknotes for the SARB, of which it is a wholly owned subsidiary. This relationship is governed by the ‘Framework agreement between the SABN and the SARB for the manufacture and supply of banknotes’. In addition to the printing of banknotes for the SARB, the SABN also prints high-security documents. Revenue derived from these two activities is treated in terms of IFRS 15, Revenue from Contracts with Customers.
To determine whether to recognise revenue in terms of IFRS 15, the SABN follows a five-step process: 1. Identifiy contracts with customers.
2. Identify performance obligations in terms of each contract.
3. Determine the transaction price.
4. Allocate the transaction price to the performance obligations.
5. Recognise revenue when/as performance obligations are satisfied.
The timing of revenue recognition is either at a point in time or when (or as) the SABN satisfies performance obligations by transferring the promised goods or services to its customers.
50 Annual Report 2021
South African Bank Note Company (RF) Proprietary Limited