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Basis Of Presentation And Summary Of Significant Accounting Policies
3 Months Ended
Sep. 30, 2023
Basis Of Presentation And Summary Of Significant Accounting Policies [Abstract]  
Basis Of Presentation And Summary Of Significant Accounting Policies
1.
 
Basis of Presentation and Summary of Significant Accounting
 
Policies
Unaudited Interim Financial Information
The accompanying
 
unaudited condensed
 
consolidated financial
 
statements include
 
all majority-owned
 
subsidiaries over
 
which
the Company exercises
 
control and have been
 
prepared in accordance with
 
U.S. generally accepted accounting
 
principles (“GAAP”)
and
the rules
 
and
 
regulations
 
of the
 
United
 
States Securities
 
and
 
Exchange
 
Commission
 
for
 
Quarterly
 
Reports on
 
Form 10-Q
 
and
include all of
 
the information and
 
disclosures required for
 
interim financial reporting.
 
The results of
 
operations for the
 
three months
ended
 
September 30,
 
2023 and
 
2022, are
 
not necessarily
 
indicative of
 
the results
 
for
 
the full
 
year.
 
The Company
 
believes that
 
the
disclosures are adequate to make the information presented not misleading.
These
 
unaudited
 
condensed
 
consolidated
 
financial
 
statements
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
the
 
financial
 
statements,
accounting policies and financial notes thereto included in the
 
Company’s Annual Report on Form 10-K for the fiscal year ended June
30,
 
2023.
 
In
 
the
 
opinion
 
of
 
management,
 
the
 
accompanying
 
unaudited
 
condensed
 
consolidated
 
financial
 
statements
 
reflect
 
all
adjustments (consisting only of normal recurring adjustments), which are necessary for a fair
 
representation of financial results for the
interim periods presented.
 
References to “Lesaka” are references
 
solely to Lesaka Technologies,
 
Inc. References to the “Company” refer
 
to Lesaka and its
consolidated subsidiaries, collectively,
 
unless the context otherwise requires.
 
Recent accounting pronouncements adopted
In June 2016, the Financial Accounting Standards Board issued guidance regarding
Measurement of Credit Losses on Financial
Instruments
.
 
The
 
guidance
 
replaces
 
the
 
incurred
 
loss impairment
 
methodology
 
in
 
current GAAP
 
with
 
a
 
methodology
 
that
 
reflects
expected credit
 
losses and requires
 
consideration of
 
a broader range
 
of reasonable
 
and supportable
 
information to inform
 
credit loss
estimates.
 
For
 
trade
 
and
 
other
 
receivables,
 
loans,
 
and
 
other
 
financial
 
instruments,
 
an
 
entity
 
is
 
required
 
to
 
use
 
a
 
forward-looking
expected loss
 
model rather
 
than the incurred
 
loss model for
 
recognizing credit
 
losses, which reflects
 
losses that are
 
probable. Credit
losses relating to
 
available-for-sale debt securities will
 
also be
 
recorded through an
 
allowance for credit
 
losses rather than
 
as a
 
reduction
in the amortized cost basis of the securities. The guidance became effective for the Company beginning July 1, 2023. The adoption of
this guidance did not have a material impact on the Company’s
 
financial statements and related disclosures, refer to Note 2.
In November
 
2019, the
 
FASB
 
issued guidance
 
regarding
 
Financial
 
Instruments—Credit
 
Losses (Topic
 
326),
 
Derivatives and
Hedging
 
(Topic
 
815),
 
and
 
Leases
 
(Topic
 
842).
 
The
 
guidance
 
provides
 
a
 
framework
 
to
 
stagger
 
effective
 
dates
 
for
 
future
 
major
accounting
 
standards
 
and
 
amends
 
the
 
effective
 
dates
 
for
 
certain
 
major
 
new
 
accounting
 
standards
 
to
 
give
 
implementation
 
relief
 
to
certain types
 
of entities,
 
including Smaller
 
Reporting Companies.
 
The Company
 
is a Smaller
 
Reporting Company.
 
Specifically,
 
the
guidance changes some effective
 
dates for certain
 
new standards on
 
the following topics
 
in the FASB Codification, namely Derivatives
and Hedging
 
(ASC 815);
 
Leases (ASC
 
842); Financial
 
Instruments —
 
Credit Losses
 
(ASC 326);
 
and Intangibles
 
— Goodwill
 
and
Other
 
(ASC
 
350).
 
The
 
guidance
 
defers
 
the
 
adoption
 
date
 
of
 
guidance
 
regarding
Measurement
 
of
 
Credit
 
Losses
 
on
 
Financial
Instruments
 
by the
 
Company from
 
July 1, 2020
 
to July
 
1, 2023.
 
The guidance
 
became effective
 
for the
 
Company beginning
 
July 1,
2023. The
 
adoption of
 
this guidance
 
did not
 
have a
 
material impact
 
on the
 
Company’s
 
financial statements
 
and related
 
disclosures,
refer to Note 2.
The Company’s updated accounting
 
policy regarding allowance for credit losses is as follows:
Allowance for doubtful accounts receivable
Allowance for doubtful finance loans receivable
The Company uses historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for its lending
books. The allowance for credit losses related
 
to Consumer finance loans receivables is calculated by multiplying the
 
lifetime loss rate
with
 
the
 
month-end
 
outstanding
 
lending
 
book.
 
The
 
allowance
 
for
 
credit
 
losses
 
related
 
to
 
Merchant
 
finance
 
loans
 
receivables
 
is
calculated
 
by
 
adding
 
together
 
actual
 
receivables
 
in
 
default
 
plus
 
multiplying
 
the
 
lifetime
 
loss
 
rate
 
with
 
the
 
month-end
 
outstanding
lending
 
book.
 
Prior to
 
July 1,
 
2023,
 
the
 
Company
 
regularly
 
reviewed
 
the ageing
 
of outstanding
 
amounts
 
due
 
from borrowers
 
and
adjusted its allowance based on management’s estimate of the recoverability
 
of the finance loans receivable. The Company writes off
microlending finance
 
loans receivable and
 
related service fees
 
and interest if
 
a borrower is
 
in arrears with
 
repayments for more
 
than
three months
 
or is
 
deceased. The
 
Company writes
 
off merchant
 
and working
 
capital finance
 
receivables and
 
related fees
 
when it
 
is
evident that reasonable recovery procedures, including where deemed necessary,
 
formal legal action, have failed.
 
1.
 
Basis of Presentation and Summary of Significant Accounting
 
Policies (continued)
Allowance for doubtful accounts receivable (continued)
Allowance for doubtful accounts receivable
The Company uses a lifetime loss rate by expressing write-off experience as a percentage of corresponding
 
invoice amounts (as
opposed to outstanding balances).
 
The allowance for credit
 
losses related to these
 
receivables has been calculated
 
by multiplying the
lifetime
 
loss
 
rate
 
with
 
recent
 
invoice/origination
 
amounts.
 
Prior
 
to
 
July
 
1,
 
2023,
 
A
 
specific
 
provision
 
is
 
established
 
where
 
it
 
is
considered likely that all or
 
a portion of the
 
amount due from
 
customers renting safe assets,
 
point of sale (“POS”)
 
equipment, receiving
support and maintenance
 
or transaction services or
 
purchasing licenses or
 
SIM cards from the
 
Company will not be
 
recovered. Non-
recoverability
 
is assessed
 
based
 
on a
 
quarterly
 
review
 
by management
 
of
 
the ageing
 
of outstanding
 
amounts,
 
the
 
location
 
and
 
the
payment history of the customer in relation to those specific amounts.
Recent accounting pronouncements not yet adopted
 
as of September 30, 2023
There are no recent accounting pronouncements that have not yet been adopted
 
as of September 30, 2023.