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Best Accounting Practices Update on Standards of GRAP Erna Swart

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.

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Best Accounting Practices Update on Standards of GRAP Erna Swart

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  1. Best Accounting Practices Update on Standards of GRAP Erna Swart

  2. 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.

  3. 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

  4. GRAP Reporting Framework

  5. Snapshot - Reporting framework

  6. 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

  7. Overview of latest pronouncements issued by the ASB

  8. 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

  9. Standards affected by improvements project

  10. Standards affected by improvements project

  11. 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

  12. 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

  13. 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

  14. 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

  15. Overview of other projects

  16. 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.

  17. 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.

  18. 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

  19. 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

  20. Contacts www.asb.co.za Info@asb.co.za 011 697 0660 (office) 011 697 0666 (fax)

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