Page 146 - Capricorn IAR 2020

GLOSSARY OF TERMS ANNUAL FINANCIAL GLOSSARY OF TERMS STATEMENTS
NOTES TO THE CONSOLIDATED AND SEPARATE ANNUAL FINANCIAL STATEMENTS (continued)
for the year ended 30 June 2020
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.21 Insurance contracts (continued)
2.21.2 Gross premiums
Gross premiums written comprise the premiums on contracts entered into during the year. Includes all premiums for the period of risk covered by the policy, regardless of whether or not these are due for payment in the accounting period.
2.21.3 Claims paid
Claims paid are recognised in the financial statements when the liability arises and are expensed accordingly.
2.22 Interest capitalised on stage 3 impaired loans and advances
IFRS 9 requires that interest income for loans and advances classified as Stage 3 be calculated on the net carrying amount, this results in a portion of contractual interest being suspended. IFRS 9 requires that this suspended contractual interest be presented
as part of the loans and advances’ gross carrying amount. The Group has applied this requirement by presenting interest capitalised on stage 3 loans and advances as a separate reconciling item when calculating the loans and advances’ total value. Interest capitalised on stage 3 loans and advances, therefore, does not impact the net carrying amount of the loans and advances as presented on the statement of financial position. However, this change in presentation has resulted in an increased gross carrying amount of the loans and advances when compared to IAS 39.
2.23 Discontinued operations
Disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits and financial assets, which are specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the or disposal group to fair value less costs to sell.
A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess
of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non- current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.
Assets of a disposal group classified as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of profit or loss.
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