Accounting Standards Board Newsletter #1

Accounting Standards Board
Newsletter #1 - March 2024

In this edition of the Newsletter

Do you know when to recognise and how to initially measure statutory receivables?

Statutory receivables, such as property tax, traffic fines, penalties, appropriations, grants or other fees charged in terms of legislation or similar means are common in the public sector. These receivables are accounted for using GRAP 108 on Statutory Receivables.

When should you recognise a statutory receivable?

GRAP 108 does not specify when a statutory receivable is recognised. The receivable is recognised with the related revenue transaction.

Revenue is recognised using either GRAP 9 on Revenue from Exchange Transactions, or GRAP 23 on Revenue from Non-exchange Transactions (Taxes and Transfers).

How is a statutory receivable initially measured?

Statutory receivables are initially measured at their transaction amount. The transaction amount is the amount specified in, or calculated, levied or charged in accordance with legislation or similar means, for example grant amounts specified in the Division of Revenue Act.

To initially measure a statutory receivable, the principles in GRAP 9 or GRAP 23 (as applicable) and GRAP 108 are applied. Both GRAP 9 and GRAP 23 require revenue to be measured at the “fair value” of the consideration received or receivable. The “fair value” determined by GRAP 9 or GRAP 23 is deemed to be the transaction amount for purposes of GRAP 108.

Do you have challenges to recognise and initially measure statutory receivables?

The Board is undertaking a post-implementation review (PIR) of GRAP 108 to assess if the Standard meets its objectives in providing relevant and useful information to users, and to understand preparers’ challenges with applying the Standard. For this purpose, the Board published an Invitation to Participate in the PIR of GRAP 108 [ED 207].

One of the areas on which the Board seeks comment is to understand entities’ challenges to recognise and initially measure statutory receivables.

How to share your comment

Comment may also be shared at roundtable consultations. Contact amandab@asb.co.za if you want to be invited to these consultations.

Disclaimer

The article has been prepared by the Secretariat of the ASB for information purposes only. It has not been reviewed, approved, or otherwise acted on by the Board.