Best Accounting Practices
Update on Standards of
GRAP
Erna Swart
Disclaimer
The views and opinions expressed in this
presentation are those of the individual.
Official positions of the ASB on
accounting matters are determined only
after extensive due process and
deliberation.
Overview
• Reporting Framework for 2013/2014
• Overview of latest pronouncements
issued by ASB
– Improvements to Standards of GRAP and
amendments to GRAP 23 (ED 112 and ED 113)
– Changes in Measurement Bases following the
Initial Adoption of Standards of GRAP (ED 114)
– Standard of GRAP on Statutory Receivables
(GRAP 108)
• Overview of other projects
GRAP Reporting Framework
Snapshot - Reporting framework
30 June 2012
30 June 2013
30 June 2014
GRAP
Improved
Report in terms of new
Standards of GRAP Standards:
& IGRAPs (2011)
GRAP 21, 23, 24, 26,
103 and 104 (effective
from 1/4/2012)
Report in terms of new
Standards:
GRAP 1, 3, 7, 9, 12, 13,
16,17,25,27,31
IGRAP 1, 16
IFRS/
IPSAS
No IFRS 3
(IFRS 4 and 6)
No change
IFRIC 20
Not yet
effective
Accounting policy
(IFRS or GRAP):
•GRAP 21, 26, 25,
104
•GRAP 103
(voluntary)
Accounting policy:
•GRAP 105-107
Other Standards
effective not yet effect
Accounting policy (IFRS
or GRAP:
•GRAP 25
Accounting policy:
•GRAP 105-107
Disclosure
GRAP 20 or IPSAS 20
Accounting policy:
•GRAP 105-107
Disclosure:
•GRAP 20 or IPSAS 20
Not
applicable
No change
No change
GRAP 18
Reporting Framework for
2013/14
• GRAP Reporting Framework 2013/2014
– New effective Standard
• GRAP 25 effective from 1 July 2013)
– Improvements 2012 (effective 1 July 2013)
• Minor improvements affecting GRAP 1, 3, 7, 9, 12,
13, 16 and 17
• GRAP 101 and GRAP 102 - revised and replaced
by GRAP 27 and 31
• IGRAP 1 (revised) and IGRAP 16
Overview of latest
pronouncements issued by
the ASB
Proposed Improvements to
Standards of GRAP (ED 112)
• Bi-annual improvements to effective
Standards of GRAP
• Minor non-urgent revisions
• Includes amendments to 6 new effective
Standards of GRAP
• GRAP 5 and GRAP 100 excluded from
Improvements project
Standards affected by
improvements project
GRAP Standard
Affected paragraphs
GRAP 1
Presentation of Financial Statements
11, 44, 44A-44D, 45A45D, 46, 48, Appendix
GRAP 2
Cash Flow Statements
Appendix
GRAP 3
Accounting Policies, Changes in
Accounting Estimates & Errors
Appendix
GRAP 7
Investments in Associates
Appendix
GRAP 10
Financial Reporting in Hyperinflationary
Economies
01, 06, Appendix
GRAP 11
Construction Contracts
Appendix
GRAP 13
Leases
Appendix
GRAP 17
Property, Plant and Equipment
06, 08, 29
GRAP 19
Provisions, Contingent Liabilities &
Contingent Assets
Appendix
Standards affected by
improvements project
GRAP Standard
Affected paragraphs
GRAP 21
Impairment of Non-cash-generating
Assets
09, 09A, .10 -14, 17, 21,
22, 32, 76, 77,Appendix
GRAP 24
Presentation of Budget Information in
Financial Statements
06, 22, Appendix
GRAP 25
Employee Benefits
08, 53, 123, Appendix
GRAP 26
Impairment of Cash-generating
Assets
10, 10A, 11-15, 22, 25,
27, 79, 99, 119, Appendix
GRAP 31
Intangible Assets
73, 78, 85, 85A, 111,
Appendix
GRAP 103
Heritage Assets
02, 03, 11, 16, 26, 27,
32A-B, 35, 53, 54, 55, 8082
GRAP 104
Financial Instruments
84, 84A, 86, 88, Appendix
Proposed Amendments to
GRAP 23 (ED 113)
• Mandatory recognition of services in-kind
– to the extent that services received are
significant to an entity’s operations and/or
service delivery objectives and recognition
criteria is met
• Clarification that services in-kind are not
limited to services provided by individuals
but include right to use the assets
Proposed once-off change to
measurement bases (ED 114)
• Proposal to allow entity to change its
measurement bases from fair value or
revaluation to cost method
• Once-off change when inappropriate
accounting policy was elected on initial
adoption of Standards of GRAP
• Limited effective date
Statutory receivables
(GRAP 108)
• GRAP 108 applies to recognition,
measurement and disclosure
• Statutory receivables
– receivables that arises from legislation,
supporting regulations or similar means and
– require settlement by another entity in cash or
another financial asset
• Can be an exchange or non-exchange
transaction
Statutory receivables
(GRAP 108)
• Initial recognition
– At transaction amount
– Apply either GRAP 9 or GRAP 23
• Subsequent measurement
– Cost method
– Reflect any interest or other charges accrued,
impairment losses or amounts derecognised
Overview of other projects
Post-implementation Review
• Respondents to DP 5 requested the ASB to
consider whether any further simplifications
could be made to Standards.
• ASB agreed that further changes can only be
made by assessing users’ information needs.
• Review focuses on:
– Whether users information needs met by GRAP
(limited to GRAP 16 and 17 as a pilot project)
– Preparers comment on experiences in applying
GRAP Standards.
Post-implementation Review
• Project involves extensive consultation (in
various ways) with users and preparers.
• Undertaken for 6 months, commencing end
June/July.
• Results will be used to assess possible
actions by the ASB, OAG or other entities.
Think Piece on Materiality
• Misunderstanding and misapplication of
materiality.
• Results in a “compliance” culture rather than
responding to users’ information needs.
• Paper focus on the following:
– How ASB considers materiality in the standard
setting process
– How preparers should consider materiality in
applying Standards of GRAP
Think Piece on Materiality
– How preparers should apply materiality when
deciding on information to be disclosed.
– How auditors consider materiality in audit
process.
Possible outcome may be a Standard issued
by ASB, or a Guideline (or something similar)
issued by the OAG
Contacts
•
•
•
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www.asb.co.za
Info@asb.co.za
011 697 0660 (office)
011 697 0666 (fax)