1. Note Financial assets and liabilities classified as fair value through profit or loss on initial recognition Financial assets and liabilities at amortised cost PPS ProfitShare accounts and reinsurance contracts Total carrying amount Fair value 7 15 691 – – 15 691 15 691 7 6 607 – – 6 607 6 607 7 20 042 – – 20 042 20 042 7 57 – – 57 57 7 11 500 – – 11 500 11 500 9 – – 1 382 1 382 1 382 13 – 1 069 – 1 069 1 069 14 – 2 915 – 2 915 2 915 10 – – (32 293) (32 293) (32 293) – – (7 290) (7 290) (7 290) – – (240) (240) (240) 9 – – (118) (118) (118) 15 (4 495) – – (4 495) (4 495) 16 (15 086) – – (15 086) (15 086) 9 – – (13) (13) (13) 20 – (221) – (221) (221) (a) * Fair value analysis of financial statement line items with a fair value (continued) The note has been restated to align with IFRS 17 disclosures and to remove prepayments from the table Qualifying policyholders’ residual interest in the net assets of the PPS Group Group R’m 2022 Restated* Equity securities(a) Local listed International listed Debt securities(a) Government and local bonds International listed Unit trusts and pooled funds(a) Reinsurance contract assets Receivables Cash and cash equivalents PPS Profit-Share accounts Liability for remaining coverage and incurred claims Short-term insurance policy liabilities Investment contract liabilities Debt securities are designated at fair value through profit and loss and Equity securities and Unit trusts and pooled funds are mandatorily held at fair value through profit and loss. Payables Liabilities to unit trust holders Reinsurance contract liabilities NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 31 December 2023 33 36. 36.5 36.6 36.7 36.8 Critical accounting estimates and judgements in applying accounting policies (continued) Lease liabilities are discounted at each Group entity’s incremental borrowing rate. These rates are set at South African Banks’ Prime lending rate less 100 bps, which is a best estimate of the rate which Group entities would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use assets in a similar economic environment. Additional information is provided in Note 2 and Note 20 of these financial statements. The assumptions used in determining the charge to the Statement of Profit or Loss and Other Comprehensive income arising from obligations in terms of the Executive Retention Scheme include the expected growth in the PPS Profit-Share Account (rolling five-year average historical growth 9.4% (2022: 12.2%)), and the turnover of staff participating in the scheme (nil) (2022: nil). Additional information is provided in Note 19 of these financial statements. In respect of the Namibia long-term incentive and retention scheme, the cost of the benefits of the long-term incentive scheme depends on a number of assumptions used in calculating the present value under the projected unit credit method. The assumptions used in determining the charge to the statement of profit or loss and comprehensive income arising from these obligations include the expected growth in the Apportionment Account (rolling 5-year average historical growth) of 18.0% (2022: 16.8%), the turnover of staff participating in the scheme (nil) and the discount rate (an appropriate market-related yield curve as at the statement of financial position date). Any changes in these assumptions will impact the charge to the statement of profit or loss and comprehensive income. The value of owner-occupied property, investment property, and assets held for sale depends on a number of factors that are determined using a number of assumptions. The assumptions used in determining the value was based on a yield range of 8.16% to 13.71% (2022: 8.49% to 13.79%), an exit capitalisation range of 10.00% to 11.75% (2022: 10.25% to 11.50%), a revenue escalation range of 3.01% to 6.72% (2022: 3.49% to 9.26%) and an expense escalation range of 4.52% and 10.27% (2022: 5.75% to 10.00%). Any change in these assumptions will impact the values of the buildings. Additional information is provided in Note 2, Note 3 and Note 4 of these financial statements. Valuation of owner-occupied property, investment property and Non - Current Assets held for sale Deferred tax assets are recognised for unused tax losses and on deductible temporary differences to the extent that it is probable that future taxable profits will be available against which these can be utilised. Additional information is provided in Note 17 of these financial statements. Discounting of lease liability Other long-term employee benefits include employee benefits payable more than 12 months after the related service is rendered. These provisions are measured at present value, using actuarial assumptions. The discount rate is the yield at reporting date of local AA-rated government bonds that have maturity dates approximating the terms of the obligations. The calculation is performed using the projected unit credit method. Any actuarial gains and losses are recognised in the statement of comprehensive income in the period in which they arise. Valuation of retention scheme Deferred tax asset 200 Notes to the Consolidated Financial Statements
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