Equity instruments

The University subsequently measures all equity investments at fair value. Where the University’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such

investments continue to be recognised in profit or loss as other income when the University’s right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as applicable. Impairment losses (and reversal of

impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Management has elected to present fair value gains and losses on equity instruments in other

comprehensive income.

Impairment

The University assesses on a forward-looking basis the expected credit losses associated with Its debt instruments carried at amortised cost. The impairment methodology applied

depends on whether there has been a significant increase in credit risk. In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model. The expected credit loss model requires the University to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

Specifically, IFRS 9 requires the University to recognise a loss allowance for expected credit losses on debt investments subsequently measured at amortised cost, contract assets and loan commitments and financial guarantee contracts to which the impairment requirements of IFRS 9 apply.

In particular, IFRS 9 requires the University to measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition, or if the financial instrument is a purchased or originated credit-impaired financial asset.

On the other hand, if the credit risk on a financial instrument has not increased significantly since initial recognition (except for a purchased or originated credit-impaired financial asset), the University is required to measure the loss allowance for that financial instrument at an amount equal to 12 months expected credit losses. IFRS 9 also provides a simplified approach for measuring the loss allowance at an amount equal to lifetime expected credit losses for trade receivables and contract assets in certain circumstances.

2.13 Provisions

Provisions are recognised when the University has a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources embodying

economic benefits will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can be made.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate. The increase in the provision due to the passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

2.14 Employee benefits

2.14.1 Accumulated annual leave

Employee entitlements to annual leave are recognised when they accrue. An accrual is made for the estimated liability for annual leave as a result of services rendered by employees up to the statement of reporting date.

2.14.2 Pension obligations

The University operates a defined benefit pension plan, the assets of which are held in a

separate trustee-administered fund. The pension plan is funded by payments from employees

and the University. Valuations of these obligations are carried out annually by independent

2.14.2 Pension obligations (continued)

actuaries. All actuarial gains and losses are recognised immediately in the year in which they arise in other comprehensive income.

The University also operates two defined contribution provident plans. The University’s contributions to these plans are charged to income as incurred.

2.14.3 Other post-retirement benefit obligations

The University provides post-retirement healthcare benefits to retirees employed by the institution prior to 1991. The entitlement to these benefits is based on the employee

remaining in service up to retirement age and the completion of a minimum service period.

The expected costs of these benefits are accrued over the period of employment, using an accounting methodology similar to that for defined benefit pension plans. Valuations of these obligations are carried out annually by independent actuaries. All actuarial gains and losses are recognised immediately in the year in which they arise in other comprehensive income.

2.14.4 Termination benefits

Termination benefits are payable when employment is terminated by the institution before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits.

The institution recognises termination benefits when it is demonstrably committed to either:

- terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or

- providing termination benefits as a result of an offer made to encourage voluntary redundancy.

Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

2.15 Taxes

The University is exempt from income tax.