Interfront Annual Report 2022

PART E: FINANCIAL INFORMATION 94 International Frontier Technologies SOC Ltd Trading as Interfront Financial Statements for the year ended 31 March 2022 1.12 Provisions and Contingencies (continued) The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. All provisions of the entity are short term in nature and the effect of discounting is immaterial. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Provisions are reversed if it is no longer probable that an outflow of resources embodying economic benefits or service potential will be required, to settle the obligation. A provision is used only for expenditures for which the provision was originally recognised. Provisions are not recognised for future operating deficits. 1.13 Revenue from Exchange Transactions Revenue from exchange transactions comprises the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets. Measurement Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates. Rendering of services When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the reporting date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied: • The amount of revenue can be measured reliably; • It is probable that the economic benefits or service potential associated with the transaction will flow to the entity; • The stage of completion of the transaction at the reporting date can be measured reliably; and • The costs incurred for the transaction and the costs to complete the transaction can be measured reliably. When services are performed by an indeterminate number of acts over a specified time frame, revenue is recognised on a straight-line basis over the specified time frame, unless there is evidence that some other method better represents the stage of completion. When a specific act is much more significant than any other act, the recognition of revenue is postponed until the significant act is executed. Service revenue is recognised by reference to the stage of completion of the transaction at the reporting date. Stage of completion is determined by services performed to date as a percentage of total services to be performed. 1.14 Interest Received Investment income is recognised on a time-proportion basis using the effective interest method. 1.15 Translation of Foreign Currencies Foreign currency transactions A foreign currency transaction is recorded in rands, on initial recognition, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At each reporting date foreign currency monetary items are translated using the closing rate.