OMBUD COUNCIL ANNUAL REPORT 2024/25

PART F: FINANCIAL INFORMATION

1.8 PREPAYMENTS Prepayments are payments made in advance for services or goods that have not been delivered for which the Ombud Council expects delivery in the next financial period. Prepayments are recognised as current assets and are not discounted as the discounting effect thereof is considered immaterial. 1.9 REVENUE FROM EXCHANGE TRANSACTIONS Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from National Treasury and the FSCA. An exchange transaction is one in which the entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value (primarily in the form of goods, services or use of assets) to the other party in exchange. Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. INTEREST RECEIVED Revenue arising from the use by others of entity assets yielding interest, royalties and dividends or similar distributions is recognised when: ● It is probable that the economic benefits or service potential associated with the transaction will flow to the entity, and ● The amount of the revenue can be measured reliably. Interest is recognised using the effective interest rate method for financial instruments, and using the nominal interest rate method for statutory receivables. Interest levied on transactions arising from exchange or non-exchange transactions is classified based on the nature of the underlying transaction. 1.10 REVENUE FROM NON-EXCHANGE TRANSACTIONS Non-exchange transactions are defined as transactions where the entity receives value from another entity without directly giving approximately equal value in exchange. Revenue is recognised when the asset is recognised and if an obligation arises from the receipt of the asset, the revenue is recognised to the extent that there is no further obligation. Revenue from non-exchange transactions comprises levies and other income. The Ombud Council is funded through levies charged to the industry from 01 April 2023. The levies are accounted for on an accrual basis. In addition, in the 2023/2024 financial year, funding was obtained from the National Treasury to assist with the establishment of the Ombud Council. The funding was been accounted for as a transfer from the National Treasury. The transfer is was not subject to any conditions. Services in-kind are recognised as assets and revenue when they are significant to operations and/or service delivery objectives and it is probable that the future economic benefits or service potential will flow to the entity and the fair value of the assets and revenue can be measured reliably. If the services in-kind are not significant to the operations and/or service delivery objectives and/or do not satisfy the criteria for recognition, the nature and type of services in-kind received during the reporting period are disclosed in the notes to the annual financial statements. 1.11 EMPLOYEE BENEFITS SHORT-TERM EMPLOYEE BENEFITS The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as annual leave and bonuses), are recognised in the period in which the employee renders the related service.

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OMBUD COUNCIL ANNUAL REPORT 2024/25