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118 CA Sri Lanka Integrated Annual Report 2024

Notes to the Financial Statements Contd.

flows from the sale of collateral held Cash and cash equivalents comprise (PUC) method. The present value of the
or other credit enhancements that are cash in hand, cash at bank, deposits at defined benefit obligation is determined
integral to the contractual terms. bank and repurchase agreements. by discounting the estimated future cash
outflows, using interest rates that are
For trade receivables, the Institute applies Bank overdraft is included as a denominated in the currency in which
a simplified approach in calculating ECLs. component of cash and cash equivalents the benefits will be paid and that have
for the purpose of the statement of cash terms to maturity approximating to the
A provision is made for all receivables flows, which has been prepared using the terms of the related liability. The present
outstanding for more than 365 days, ‘indirect method’. value of the defined benefit obligations
considering recoverability. Government- depends on a number of factors that
backed student loan debts are excluded 2.2 Liabilities and Provisions are determined on an actuarial basis
from provisioning since guarantees exist. A liability is classified as current when it using a number of assumptions about
Write-offs are recognized when debt is is expected to be settled in the normal discount rate, future salary increments
deemed irrecoverable. operating cycle; held primarily for the and mortality rates. Due to the long-term
purpose of trading, it is due to be settled nature of these plans, such estimates
2.1.10 Reclassification within twelve months after the reporting are subject to significant uncertainty.
Financial assets are measured at period or there is no unconditional right All assumptions are reviewed at each
amortised cost as the management to defer the settlement of the liability for reporting date. Accordingly, the employee
intends to hold these instruments to at least twelve months after the reporting benefit liability is based on the actuarial
collect the contractual cash flows upon period. The Institute classifies all other valuation as of 31 December 2024. The
completion of the Solely Payments of liabilities as non-current. Institute’s accounting policy for gratuity
Principal and Interest (SPPI) test and is to recognise actuarial gains and losses
evaluating the historical data. As of 1st 2.2.1 Deferred Income in the period in which they occur in full
January 2018, the Institute has elected Deferred income results when in the statement of other comprehensive
the business model of hold to collect the invoices relating to courses and income.
contractual cash flows and measured the study programmes are raised at the
instruments at amortized cost. commencement of the courses where (b) Defined Contribution Plans-
the course delivery takes place over Employees’ Provident Fund and
Financial assets are not reclassified a period of several months. Deferred Employees’ Trust Fund
subsequent to their initial recognition, income is recognized in the statement Employees are eligible for Employees’
except and only in those rare of comprehensive income to the extent Provident Fund Contributions and
circumstances when the Institute of course delivery taken place and the Employees’ Trust Fund Contributions
changes its objective of the business balance attributable to the remaining in line with respective statutes and
model for managing such financial assets. course period is recognized as a liability regulations. These are recognized
on the statement of financial position until as an expense in the statement of
Consequent to the change in the income is recognized. comprehensive income as incurred.
business model, if any, the Institute The Institute contributes 15% and 3%
reclassifies all affected assets 2.2.2 Provisions of gross emoluments of the employees
prospectively from the first day of the A provision is recognized in the statement to Employees’ Provident Fund and
next reporting period (the reclassification of financial position, when Institute has Employees’ Trust Fund respectively.
date). Prior periods are not restated. a legal or constructive obligation as a
result of a past event, it is probable that an 2.2.4 Taxation
2.1.11 Financial Liabilities outflow of assets will be required to settle
All financial liabilities are measured the obligation and the obligation can be (a) Income Tax
at amortised cost, except for financial measured reliably. The provision for current taxation has
liabilities at fair value through profit or been computed in accordance with the
loss. The Institute does not have financial 2.2.3 Employee Benefits Inland Revenue Act No 24 of 2017 and
liabilities other than payables for the year as amended subsequently by Inland
ended 31st December 2024. (a) Employee Defined Benefit Plan - Revenue (Amendment) Act, No. 45 of
Gratuity 2022.
2.1.12 Cash and Cash Equivalents Defined benefit plan is a post-
The Institute considers cash in hand as employment benefit plan, other than a (b) Deferred Taxation
amounts due from banks and short-term defined contribution plan. The defined Since the Institute is not carrying on a
deposits with an original maturity of three benefit is calculated by an independent trade or business capital allowances
months or less to be “Cash and cash actuary using Projected Unit Credit have not been claimed against the liable
equivalents”.