Company: KARO
Filing Date: 2025-06-09
Form Type: 20-F
Source: 0001213900-25-052372
Chunk: 193

Company: Karooooo Ltd.
Filing Date: 2025-06-09
Form: 20-F
Item: Item 19
Chunk 193
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 FVPL”)

Assets that do not meet the criteria
for amortized cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt instrument that is subsequently
measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss in the period
in which it arises.

Derecognition

A financial asset is derecognized where
the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference
between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognized in other
comprehensive income for debt instruments is recognized in profit or loss.

ii.
Financial liabilities

Initial recognition and measurement

Financial liabilities are recognized
when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification
of its financial liabilities at initial recognition.

All financial liabilities are recognized initially at fair
value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement

After initial recognition, financial
liabilities that are not carried at fair value through profit or loss are subsequently measured at amortized cost using the effective
interest rate method. Gains and losses are recognized in profit or loss when the liabilities are derecognized, and through the amortization
process.

Derecognition

A financial liability is derecognized
when the obligation under the liability is discharged or cancelled or expired. On derecognition, the difference between the carrying amounts
and the consideration paid is recognized in profit or loss.

d)
Derivative financial instruments

Derivatives are initially measured
at fair value and any directly attributable transactions are recognized in profit or loss as incurred. Subsequent to initial recognition,
derivatives are measured at fair value, and changes therein are generally recognized in profit or loss. For derivatives entered as a transaction
with owner, changes in the fair value are recognized directly in equity.

e)
Impairment of financial assets

The Group recognizes an allowance for
expected credit losses (“ ECLs”) for all debt instruments not held at fair value through profit or loss. ECLs are based on
the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to
receive, discounted at an approximation of the original effective interest rate. The expected