Page 91 - Continental Reinsurance 2022 Annual Report

Statement of Significant Accounting Policies
An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated
recoverable amount. The recoverable amount is the
higher of the asset’s fair value less costs to sell and
value in use. No property, plant and equipment were
impaired as at 31 December 2022 (2021: nil).
Property, plant and equipment is derecognized on
disposal or when no future economic benefits are
expected from its use. Any gain or loss arising on
derecognition of the asset (calculated as the
difference between the net disposal proceeds and the
carrying amount of the assets) is recognized in other
income in the profit or loss in the year the asset is
derecognized.
2.18 Leases
The determination of whether an arrangement is a
lease, or contains a lease, is based on the substance of
the arrangement at the inception date and requires an
assessment of whether the fulfillment of the
arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to
use the asset, even if that right is not explicitly
specified in an arrangement.
Group as lessor
Leases in which the Group does not transfer
substantially all of the risks and benefits of ownership
of the asset are classified as operating leases. Initial
direct costs incurred in negotiating an operating lease
are added to the carrying amount of the leased asset
and recognised over the lease term on the same bases
as rental income. Contingent rents are recognised as
revenue in the period in which they are earned.
2.19 Intangible assets
Intangible assets comprise computer software
licenses, which are with finite lives, are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired.
The amortisation period and amortisation method for
an intangible asset with a finite useful life are reviewed
at least at each financial year end. Changes in the
expected useful life or the expected pattern of
consumption of future economic benefits embodied in
the asset are accounted for by changing the
amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite
lives is recognised in the profit or loss in the expense
category consistent with the function of the intangible
asset.
89
The Group chooses to use the cost model for the
measurement after recognition.
Amortisation is calculated on a straight line basis over
the useful lives as follows:
Computer software: 3 years
2.20 Reinsurance creditors
Reinsurance payables are recognised when due and
measured on initial recognition at the fair value of the
consideration received given less directly attributable
transaction costs. Subsequent to initial recognition,
they are measured at amortised cost using the
effective interest rate method.
Reinsurance payables are derecognised when the
obligation under the liability is settled, cancelled or
expired.
2.21 Income tax
a Current income tax
Income tax payable/(receivable) is calculated on the
basis of provision of the income tax act (CITA 1979 as
amended) and is recognised as an expense/(income)
for the period except to the extent that current tax
related to items that are charged or credited in other
comprehensive income or directly to equity. In these
circumstances, current tax is charged or credited to
other comprehensive income or to equity. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the
reporting date in the countries where the Group
operates and generates taxable income.
Where the Group has tax losses that can be relieved
against a tax liability for a previous year, it recognises
those losses as an asset, because the tax relief is
recoverable by refund of tax previously paid.
Where tax losses can be relieved only by carry-
forward against taxable profits of future periods, a
deductible temporary difference arises. Those losses
carried forward are set off against deferred tax
liabilities carried in the statement of financial position.
The Group does not offset income tax liabilities and
current income tax assets.
b Deferred income tax
Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities and their
carrying amounts in the financial statements.
Deferred income tax is determined using tax rates