SAB&Tips

A lessee can choose to apply IFRS 16 through either a full retrospective approach or using a simplified approach. The simplified approach seems to provide some benefits to the preparers of financial statements when applying module 2.View PDF

Whilst IFRS 15 is primarily a standard on revenue recognition, it contains specific requirements relating to contract costs. Companies may therefore need to change their accounting for those costs on adoption of IFRS 15 for annual reporting periods beginning on or after 1 January 2018. View PDF

The IASB has developed IFRS 16 as a new leases Standard which supersedes IAS 17. A company is required to apply the new leases from 01 January 2019. View PDF

The Companies Act 71 of 2008 no longer permits companies to have shares of par value, resulting in companies no longer recognizing share premiums. In this issue we look at what this means for existing share premium accounts. View PDF

As the effective date for Parts 1 and 3 of the IRBA Code differs from that of Parts 4A and 4B, it will have an impact on how the IRBA Code is described in the auditor’s and assurance reports. View PDF

IFRS 15, Revenue from Contracts with Customers came into effect for years commencing on or after 1 January 2018, with many entities having fully adopted the new Standard at this point. One of the more practical issues which entities are likely to encounter is the accounting requirements for non-cash consideration. View PDF

On Friday, 21 September 2018 the Department of Trade and Industry published the draft Companies Amendment Bill 2018 for comment and comments closed on 20 November 2018. The following is a summary of the more significant changes proposed by the Bill. View PDF

One of the most complex and rapidly evolving issues which affect all entities is cybersecurity. This leads to the question of whether cybersecurity risk is relevant to the audits of financial statements. What is the auditor’s responsibility in respect of cybersecurity risk when planning and performing audits? View PDF

The IASB has recently published its revised ‘Conceptual Framework for Financial Reporting’. The project was initiated in 2004 however due to a series of changed priorities and abandonment in 2010 followed by a phase by phase approach, the resultant framework does not constitute a substantial revision as was originally intended, but instead focuses on topics that were not yet covered or that showed obvious shortcomings that needed to be dealt with. The Board and Interpretations Committee will immediately begin using the revised Framework. It is effective for annual periods beginning on or after 1 January 2020 for preparers that develop an accounting policy based on the Framework. View PDF

There are different interpretations as to when one should “discount” revenue or purchases. There are two totally different views - the first one being that discounting begins on the day after the recognition of a sale or purchase and the second one allows for the concept of “extended payment terms” beyond “industry norms”. Note: This does not apply to debtors or creditors. View PDF

As of 1 April 2018, the effective VAT rate will rise from 14% to 15%. There are important aspects to consider as a result of the increase. The VAT rate to apply to transactions depends on the “time of supply rules”. This is the date on which the transaction is deemed to occur according to the VAT Act. The general time of supply rule is the “earlier” of when (a) an invoice is issued or (b) payment is received. View PDF

IFRS 9 will become effective on 1 January 2018 and represents a fundamental change in the impairment of financial instruments. This will have a significant impact on how banks are required to calculate provisions for credit losses (impairments). The South African Reserve Bank (SARB) issued Directive 5 as a transitional arrangement and to provide clarity to banks in South Africa on how to categorise expected credit loss provisions. The transitional arrangement only applies to new provisions that did not exist prior to the adoption of the expected credit loss model. View PDF

IFRS 15 includes specific requirements related to “customer options for additional goods or services” – for example free gifts, discount vouchers, etc - and requires a distinction to be made as to whether this option confers a “material right”. We will look at what is a “material right” and how do you make this assessment. View PDF

IFRIC 22 Foreign Currency Transactions and Advance Consideration clarifies the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency. IFRIC 22 is effective for annual periods beginning on or after 1 January 2018. View PDF

IFRS 17 Insurance Contracts which establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts have been issued in May 2017. IFRS 17 supersedes IFRS4 and is effective for annual periods beginning on or after 1 January 2021. View PDF

The IASB has recently issued a number of papers with proposed amendments to reporting standards. Although these amendments are not yet finalised it is important to take note of these proposed changes. View PDF

Amendments becoming effective 1 January 2017. View PDF

The fourth revision (King IV) was already published for public comment during March 2016 and is expected to be released soon. View PDF

In 2015 the IAASB issued the new ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report. This Standard will become applicable for all audits of financial statements ending on or after 15 December 2016 View PDF

This newsletter is to give an insight to the new published guidance on the treatment of cash settled share-based payments per IFRS 2. View PDF