AMENDMENTS TO GRAP – Impact analysis for the current financial year

The Accounting Standards Board of South Africa (ASB) issued various amendments to GRAP Standards of which the Minister of Finance approved some to be effective in Government Gazette No.44881 on 13 August 2021. Entities applying GRAP are required1 to disclose the impact of these in their financial statements.

Often these amendments have little or no impact on the accounting policies applied. However, when an entity applies these for the first time in its financial statements, and it impacts the accounting policies previously applied, it is required to disclose the impact in the financial statements23. Also, whilst it is not effective, the impact on the financial statements will need to be assessed and disclosed in accordance with GRAP 3.

For example, the ASB recently issued the Guideline on The Application of Materiality to Financial Statements which is approved but not yet effective. If an entity applies the guideline for the first time and chooses to voluntary amend any accounting policies as a result, it would be required to disclose the nature of the change in accounting policy, reasons why the new policy provides more reliable information and for the current and each prior periods presented, the impact and adjustments for every line item affected. For initial application of any required change in accounting policy, the entity is required to disclose the title of the Standard affected.

Standards, Guidelines and Interpretations issued and not yet effective in 2022 to consider.

DescriptionEffective Date
Amendments to GRAP 11 April 2025
Improvements to Standards of GRAP1 April 2023
Amended GRAP 104 on Financial Instruments1 April 2023
Amended GRAP 25 on Employee BenefitsNot yet effective
Guideline on Accounting for Landfill SitesNot yet effective
Guideline on The Application of Materiality to Financial StatementsNot yet effective
IGRAP 7 – Limit on a Defined Benefit Asset Min Fund Requirement and InteractNot yet effective
IGRAP 21 – The Effect of Past Decisions on MaterialityNot yet effective
1 Standard of GRAP on Accounting Policies, Changes in Accounting Estimates and Errors, GRAP 3 par. .32 to 33
2 GRAP 3.30 & 3.31

GRAP 3 requires disclosure of known or reasonable estimable information relevant in assessing the possible impact that any new Standard will have on the entity’s financial statements when the entity applies it for the first time.

Due to the significant changes in GRAP 104 and GRAP 25 it is likely that these changes will significantly impact entities. Whilst it may be difficult to quantity the impact, qualitative disclosures should still be provided to meet the objectives of GRAP 3. Every change should be assessed as it may impact recognition, measurement and disclosure. Presenting the information in a table may also assist.

Below examples are not complete, nor exhaustive of all the standards, guidelines and interpretations issued and not yet effective, but rather an example to illustrate how the analysis could be performed:

New StandardNature of changeImpact
Amendments to the Standard of GRAP on Financial Instruments (GRAP 104) – effective 1 April 2025The main changes made were to amend the scope of financial instruments, classification and reclassification rules, recognition of interest and the impairment model and disclosure…. [provide detail]It is expected that the following changes in classification will have to be made for the classification of bank accounts included in cash and cash equivalents due to … The current model for impairment of receivables only recognises …. As the entity is not issuing financial guarantee contracts or loan commitments, it is not expected that the changes in the scope will impact the entity…
Amendments to the Standard of GRAP on Employee Benefits (GRAP 25) – not yet effectiveThe main impact relates to amendments regarding the presentation of defined benefit plans and the fact that minimum funding requirements in the post-employment benefit plan may give rise to a liability. …. [provide detail]Presentation of the components to be presented in the statement of financial performance will result in the cost being grouped between service cost, net interest and remeasurements….
Guideline for the Accounting for Landfill Sites (2021)The guideline provides specific guidance …The entity does not expect that this guideline will be adopted as …
3 GRAP 20,32,108,109 and 110 become effective 1 April 2021 for trading entities. These were effective 1 April 2020 and earlier for other entities – refer to ASB’s website.

Belinda van der Merwe