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penditure expected to be required to settle the obligation.
Where some or all of the expenditure required to settle a
provision is expected to be reimbursed by another party,
the reimbursement shall be recognised when, and only
when, it is virtually certain that reimbursement will be re-
ceived if the entity settles the obligation. The reimburse-
ment shall be treated as a separate asset. The amount
recognised for the reimbursement shall not exceed the
amount of the provision.
Provisions are not recognised for future operating losses.
If an entity has a contract that is onerous, the present
obligation under the contract shall be recognised and
measured as a provision.
Contingent assets and contingent liabilities are not
recognised. Contingencies are disclosed in note 29.
1.15 Revenue
Revenue from the sale of goods is recognised when all
the following conditions have been satisfied:
•
the group has transferred to the buyer the signifi-
cant risks and rewards of ownership of the goods;
•
the group retains neither continuing managerial
involvement to the degree usually associated with
ownership nor effective control over the goods sold;
•
the amount of revenue can be measured reliably;
•
it is probable that the economic benefits associated
with the transaction will flow to the group; and
•
the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
When the outcome of a transaction involving the render-
ing of services can be estimated reliably, revenue associ-
ated with the transaction is recognised by reference to
the stage of completion of the transaction at the end of
the reporting period. The outcome of a transaction can
be estimated reliably when all the following conditions
are satisfied:
•
the amount of revenue can be measured reliably;
•
it is probable that the economic benefits associated
with the transaction will flow to the group;
•
the stage of completion of the transaction at the end
of the reporting period can be measured reliably; and
•
the costs incurred for the transaction and the costs to
complete the transaction can be measured reliably.
Administration fees Administration fees charged consist
of two components:
•
Origination fees on loans granted
These fees are charged upfront, are capitalised into
the loan, and are primarily based on the cost of grant-
ing the loan to the individual. In accordance with IAS
18 Revenue, these origination fees are considered an
integral part of the loan agreement and therefore
recognised as an integral part of the effective inter-
est rate and are accounted for over the shorter of the
original contractual term and the actual term of the
loan using the effective interest rate method. The
deferred portion of the fees is recorded in the state-
ment of financial position as a provision for deferred
administration fees.
•
Monthly servicing fees
These are fees which form an integral part of the
effective interest rate and are charged to custom-
ers on a monthly basis. These fees are recognised as
part of the effective interest rate over the shorter
of the original contractual term and the actual term
of the loans and receivables. Beyond the original
contractual term of the loan, the fee is recognised
in profit or loss as it is charged to the customer on
a monthly basis.
While both these components are regarded as integral
parts of the effective interest rate, they are not account-
ed for as interest income, but as non-interest income.
Revenue is measured at the fair value of the consider-