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CA Sri Lanka Integrated Annual Report 2024 115

their responsibility for the financial effects on the amounts recognised in the (b) Depreciation
statements and financial statements were financial statements is as follows. Depreciation is calculated by using a
approved and authorised for issue by straight-line method on the cost of all
the Council at the meeting held on 27th (a) Defined Benefit Plans property, plant and equipment, in order to
March 2025. The cost of the defined benefit plan of write-off such amounts over the estimated
employees is determined using Projected useful life of such assets.
1.6.5 Materiality and Aggregation Unit Credit (PUC) method. Such method
Each material class of similar items is involves use of assumptions concerning The estimated useful lives of assets are as
presented separately in the financial the discount rate & future rate of salary follows:
statements. Items of a dissimilar nature or increments. Due to the long-term nature Useful Life
function are presented separately, unless of the plan, such estimates are subject to Asset Category (Years)
they are immaterial. significant uncertainty.
Buildings 50
1.6.6 Functional and Presentation (b) Estimating the Incremental Furniture, Fittings and 5- 10
Currency Borrowing Rate Fixtures
The financial statements are presented in As the Institute cannot readily determine Plant and Machinery 5-10
Sri Lankan Rupees, which is the Institute’s the interest rate implicit in the lease, it Motor Vehicles 10
functional and presentation currency, in uses its incremental borrowing rate (IBR) Computers 5
the primary economic environment in to measure the lease liabilities. IBR is a
which the Institute operates. rate of interest that a lessee would have Depreciation of an asset begins when
to pay to borrow similar facility from a it is available for use and ceases at the
All financial information presented in financial institution. earlier date that the asset is classified as
Sri Lankan Rupees have been rounded held for sale and the date that the asset is
to the nearest thousand, unless stated (c) Changes in Accounting Estimates derecognised.
otherwise. and Judgments
Any changes in accounting estimates and Significant items of property, plant and
1.7 Significant Accounting critical judgements are disclosed in the equipment with different useful lives are
Estimates and Judgments relevant notes to the financial statements. separately identified and depreciated.
Accounting estimates are monetary
amounts in financial statements that are 2. SUMMARY OF SIGNIFICANT Depreciation on property, plant and
subject to measurement uncertainty. ACCOUNTING POLICIES equipment purchased through restricted
The preparation and presentation of 2.1 Assets and the Bases of Their funds is charged to the statement
financial statements, in conformity with Valuation of comprehensive income. The
Sri Lanka Accounting Standards, requires 2.1.1 Property, Plant and Equipment correspondent grant amount is amortised
Management to make judgments, over the useful life of the related asset.
estimates and assumptions that affect (a) Basis of Recognition and
the application of accounting policies Measurement (c) Right of Use Assets and Lease
and reported amounts of assets, liabilities, Property, plant and equipment are Liabilities
income and expenses. Actual results may recognised if it is probable that future The Institute recognises a right-of-use
differ from these estimates and judgments economic benefits associated with the asset and a lease liability at the lease
used. asset will flow to the Institute and the cost commencement date. Right-of-use
of the asset can be measured reliably. assets are measured at cost, less
Estimates and underlying assumptions All property, plant and equipment are any accumulated depreciation and
are reviewed on an ongoing basis. stated initially at cost and subsequently impairment losses, and adjusted for any
Revisions to accounting estimates are measured at cost less accumulated remeasurement of lease liabilities. The
recognised in the period in which the depreciation and any impairment cost of right-of-use assets includes the
estimate is revised, if the revision affects losses. Repair and maintenance costs amount of lease liabilities recognised,
only that period or in the period of the are recognised in the statement of initial direct costs incurred, and lease
revision and future periods if the revision comprehensive income as incurred. payments made at or before the
affects both current and future periods. The carrying values of property, plant commencement date less any lease
Information about significant areas and equipment are reviewed for incentives received. Right-of-use assets
of estimates, uncertainty and critical impairment when events or changes are depreciated on a straight-line basis
judgments in applying accounting in circumstances indicate that carrying over the shorter of the lease term and the
estimated useful lives of the assets.
policies that have the most significant value may not be recoverable.