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124 CA Sri Lanka Integrated Annual Report 2024

Notes to the Financial Statements Contd.

(a) Project Expenses
Expenses in carrying out the projects of the Institute are recognised in the statement of comprehensive income during the period
in which they are incurred and the basis for identifying project expenses are mainly on locations of the project, staff allocated to the
project and projected activities of the project according to the project proposal.

Expenses are recognised in the statement of comprehensive income on the basis of direct association between the cost incurred
and the earning of specific items of income.

(b) Operational Expense
All expenditure incurred in the running of the Institute and in maintaining the capital assets in a state of efficiency has been charged
against income in arriving at the income over expenditure for the year.

Expenditure on examinations, seminars, courses, and other educational and members’ activities are recognised in the statement of
comprehensive income on an accrual basis.

(c) Finance Expense
Finance expenses are recognised on an accrual basis when they are paid or create liabilities.

2.5 Statement of Cash Flows
The statement of cash flows has been prepared by using the ‘Indirect Method’ of preparing of cash flows in accordance with Sri
Lanka Accounting Standard- LKAS 7 on ‘Statement of Cash Flows’. Cash and cash equivalents as referred to in the Statement of Cash
Flows are comprised of those items as explained in Note 10.

2.6 Capital Commitments and Contingencies
Contingencies are possible assets or obligations that arise from past events and would be confirmed only on the occurrence or non-
occurrence of uncertain future events, which are beyond the Institute’s control.

Capital commitments and contingent liabilities of the Institute are disclosed in the respective notes to the financial statements.

2.7 Events After the Reporting Period
The materiality of events occurring after the reporting period has been considered and appropriate adjustments, wherever necessary,
have been made to the financial statements.

2.8 Amendments to Accounting Standards issued but not yet effective
E SLFRS 17-Insuarance contracts
E Amendments to SLFRS 17