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IFRS 3 Business Combinations – New definition of Business

In October 2018 the IASB issued amendments to IFRS 3 ‘Business Combinations’ clarifying the definition of a business. These amendments are effective for financial years commencing 1 January 2020. The changes are to be applied prospectively to business combinations and asset acquisitions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020.View PDF

Budget Highlights for 2021/22

The Minister of Finance delivered his budget speech on 24 February 2021. Due to Covid pandemic, tax relief were provided mainly for individual tax to assist in the recovery of the economy. The individual tax brackets were increased with the lowest tax rate of 18% applicable to income of R216 200 and the maximum marginal rate at 45% applicable to income above R1 656 601.View PDF

Auditor’s responsibility on JSE Listing Requirement 3.84(k) – CEO / CFO sign-off on internal financial control

The JSE Listing Requirement 3.84(k) requires the Chief Executive Officer (CEO) and the financial director (FD) to sign a responsibility statement that they have implemented the necessary internal financial controls to ensure the financial statements are fairly presented and no facts have been omitted or untrue statements made. The auditor has a responsibility to conclude whether this statement is inconsistent with the financial statements or with the auditor’s knowledge obtained during the audit.View PDF

SHARE CATEGORIES – Equity or Liability?

When buying equity shares in a company, one can purchase different category shares, namely ‘ordinary shares’ (also referred to as ‘common stock’) and ‘preference shares’ (also referred to as ‘preferred stock’). Shares represent equity in a company. However, in certain circumstances shares may have to be recognised as a liability in stead of equity. This tip will look at when shares are equity and when it represents a liability.View PDF

LIABILITY – YES or NO? Should it be accrued or provided for?

This tip deals with the principle that a contractual or a statutory obligation in itself does not necessarily gives rise to a liability. For example, an entity is obligated by law to pay income tax – however – in terms of accrual accounting principles, there is no obligation to pay tax unless income has been earned. The earning of the income is the past event that gives rise to the obligation to pay the tax. In this example, the liability is classified as a tax liability in accordance with IAS 12.View PDF

CEO / CFO signoff on internal financial control – JSE Listing Requirement 3.84(k)

To ensure a higher level of accountability from executive management, the JSE Listing Requirement 3.84(k) requires the CEO and the financial director to sign a responsibility statement that they have implemented the necessary internal financial controls to ensure the financial statements are fairly presented and no facts have been omitted or untrue statements were made View PDF