Page 95 - CA Sri Lanka Integrated Annual Report 2023

2.2.1 Deferred Income (b) Defined Contribution Plans- 2.3 Accounting for the Receipt and
Employees’ Provident Fund and Utilization of Funds, Grants
Deferred income results when invoices Employees’ Trust Fund and Reserves
relating to courses and study programmes are
raised at the commencement of the courses Employees are eligible for Employees’ The Institute received various grants for
where the course delivery takes place Provident Fund Contributions and specific development activities. Funds,
over a period of several months. Deferred Employees’ Trust Fund Contributions in line grants and reserves have been classified
income is recognized in the statement of with respective statutes and regulations. as unrestricted funds, restricted funds and
comprehensive income to the extent of These are recognized as an expense in the endowment funds.
course delivery taken place and the balance statement of comprehensive income as 2.3.1 Unrestricted Funds
attributable to the remaining course period is incurred. The Institute contributes 15% and
recognized as a liability on the statement of 3% of gross emoluments of the employees Unrestricted funds are those that are
financial position until income is recognized. to Employees’ Provident Fund and available for use by the Institute at the
Employees’ Trust Fund respectively.
discretion of the Council and funds that
2.2.2 Provisions are designated for a specific purpose by
2.2.4 Taxation
A provision is recognized in the statement of the Council in furtherance of the general
financial position, when Institute has a legal a) Income Tax objectives of the Institute. Allocations
or constructive obligation as a result of a past The provision for current taxation has made by the Council for the credit of
event, it is probable that an outflow of assets been computed in accordance with the the designated funds are charged to the
will be required to settle the obligation and Inland Revenue Act No 24 of 2017 and as statement of comprehensive income.
the obligation can be measured reliably. amended subsequently by Inland Revenue Surplus funds are transferred from restricted
(Amendment) Act, No. 45 of 2022. funds to unrestricted funds in terms of
2.2.3 Employee Benefits the relevant donor agreements or with the
b) Deferred Taxation subsequent approval of the donor.
(a) Employee Defined Benefit Plan -
Gratuity Since the Institute is not carrying on a trade Contributions and donations received from
or business capital allowances have not been
Defined benefit plan is a post-employment claimed against the liable income and there the general public are recognised in the
benefit plan, other than a defined contribution are no tax losses to be set off against any statement of comprehensive income at the
plan. The defined benefit is calculated by an future taxable income. Deferred tax has not time of receipt, where there are no terms of
independent actuary using Projected Unit been provided in the financial statements. references.
Credit (PUC) method. The present value of
the defined benefit obligation is determined 2.2.5 Translation of Foreign Designated Funds
by discounting the estimated future cash Currency Transactions Unrestricted funds designated by the
outflows, using interest rates that are Council to a specific purpose are identified
denominated in the currency in which the Transactions in currencies other than Sri as designated funds. The Institute has
benefits will be paid and that have terms Lankan Rupees are converted into Sri Lankan accounted the following funds as designated
to maturity approximating to the terms of Rupees at rates which approximate the funds and the purpose of such funds are
the related liability. The present value of the actual rates at the transaction date. At the elaborated as follows,
defined benefit obligations depends on a reporting date, monetary assets (including
number of factors that are determined on an securities) and liabilities denominated in
actuarial basis using a number of assumptions foreign currency are converted into Sri
about discount rate, future salary increments Lankan Rupees at the rate of exchange
and mortality rates. Due to the long-term at that date. Non - monetary assets and
nature of these plans, such estimates liabilities in foreign currencies that are stated
are subject to significant uncertainty. All at historical cost are translated at the foreign
assumptions are reviewed at each reporting exchange rate at the date of the transaction.
date. Accordingly, the employee benefit Realized and unrealized exchange
liability is based on the actuarial valuation differences are reported in the statement of
as of 31 December 2023. The Institute’s comprehensive income.
accounting policy for gratuity is to recognise
actuarial gains and losses in the period in
which they occur in full in the statement of
other comprehensive income.

CA Sri Lanka Integrated Annual Report 2023 93