38. Critical accounting estimates and judgements in applying accounting policies (continued) financial statements. 38.6 Deferred tax asset 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 they can be utilised. Additional information is provided in Note 18 of these financial statements. 38.7 Valuation of retention scheme 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 12.2% (2021: 10.9%), and the turnover of staff participating in the scheme (nil) (2021: nil). Additional information is provided in Note 20 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 16.8% (2021: Not applicable), 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. 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 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 recognized in the statement of comprehensive income in the period in which they arise. 38.8 Discounting of lease liability 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 21 of these financial statements. 38.9 Consolidation of entities in which the group holds less than 50% The trustees have concluded that the Group controls, in the manner contemplated by IFRS, unit trusts managed by Professional Provident Society Investments Proprietary Limited Group, even though it holds less than half of the economic interest in some of these funds. Additional information is provided in Note 16 of these financial statements. 38.10 Impairment of loan to PPS Mutual Assumptions used to determine the impairment of loan to PPS Mutual are unbiased and probability-weighted and includes consideration of a range of possible outcomes. Time value of money is taken into account by the discounting of expected future losses to the reporting date at a risk-adjusted discount rate. Reasonable 167 Notes to the Consolidated Financial Statements
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