Use of judgements, estimates and assumptions The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from those estimates. (i) Judgements Judgements made in applying accounting policies that have had the most significant effects on the amounts recognised in the financial statements include: • Revenue recognition – exchange or non-exchange revenue and furthermore within non-exchange those revenues identified as having conditions versus restrictions, • The fair value of financial instruments recognised through surplus or deficit. (ii) Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The financial statements are based upon assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the College. Such changes are reflected in the assumptions when they occur. • Revaluation of investment properties The College holds its investment properties at fair value with changes in fair value being recognised through surplus or deficit in accordance with PBE IPSAS 16 - Investment Property. The College measures fair value of the investment properties based on periodic but at least triennial valuations by external independent valuers less any impairment losses recognised after the date of the revaluation. Valuations are performed with sufficient regularity to ensure that the fair value does not differ materially from its carrying amount. The key assumptions used are provided in Note 3(e). • Fair value measurement of financial instruments including share investments and derivatives Some of the College’s assets and liabilities are measured at fair value for financial reporting purposes. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in Note 3(d)(i)-(iii). a) Revenue recognition Revenue is recognised to the extent that it is probable the economic benefit will flow to the College and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The following specific recognition criteria must be met before revenue is recognised:
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