Accounting Standards Board Newsletter #2

Accounting Standards Board
Newsletter #2 - September 2022

In this edition of the Newsletter:

GRAP Reporting Framework for 2023/24 – what will change?

Role and purpose of Directive 5

Directive 5 on Determining the Reporting Framework outlines the GRAP reporting framework for a particular reporting period. The Appendices of the Directive list the standards and pronouncements that are the GRAP Reporting Framework for a reporting period. The Appendices are updated each year.

Directives are authoritative and entities have to apply Directive 5 and the list of pronouncements in the applicable Appendix to prepare financial statements for a particular reporting period.

The Board will consider the proposed Appendix to Directive 5 for 2023/24 at the September 2022 meeting for approval.

What will change for 2023/24?

There are a number of pronouncements, and changes to pronouncements, that become effective 1 April 2023. The effective dates have either been determined by the Minister of Finance or through past decisions of the Board. These pronouncements are listed below:

Pronouncement	Link to document
GRAP 25 on Employee Benefits (2021)	https://www.asb.co.za/grap-25-3/
IGRAP 7 on The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (2021)	https://www.asb.co.za/igrap-7-2/
Improvements to the Standards of GRAP (2020)	https://www.asb.co.za/wp-content/uploads/2022/04/Improvements-to-Stds-of-GRAP-2020.pdf
Amendments to GRAP 1 on Presentation of Financial Statements (2019)	https://www.asb.co.za/wp-content/uploads/2022/04/Amendments-to-GRAP-1.pdf
IGRAP 21 on The Effect of Past Decisions on Materiality	https://www.asb.co.za/igrap-21/
Guideline on Accounting for Landfill Sites	https://www.asb.co.za/wp-content/uploads/2022/04/Guideline-on-Acc-for-Landfill-Sites-1-April-2022.pdf

What about pronouncements, and changes to pronouncements that are not yet effective?

The impact of pronouncements that are not yet effective on the 2023/24 GRAP Reporting Framework is as follows:

Pronouncement	Effective date	Impact on 2023/24
GRAP 104 on Financial Instruments (revised 2019) [https://www.asb.co.za/grap-104-2/]	1 April 2025	The transitional provisions require adoption of the revised Standard taken as a whole. Partial or incremental adoption is not permitted.
GRAP 103 on Heritage Assets (2022) [https://www.asb.co.za/grap-103-2/]	The effective date must still be determined by the Minister of Finance	The pronouncement provides guidance on initial application of the revisions.
Guideline on The Application of Materiality to Financial Statements [https://www.asb.co.za/wp-content/uploads/2022/04/Guideline-on-Materiality-1-April-2022.pdf]	The guideline does not have an effective date.	Entities are encouraged to apply it.

What about pronouncements of international standard-setters?

The Appendices to Directive 5 include pronouncements issued by other standard-setters that should be considered by entities in preparing their financial statements for a particular reporting period.

Pronouncements of other standard-setters can only be used to formulate accounting policies; they cannot be adopted by entities.

A communication on the IPSAS and IFRS Standards that entities should not consider when formulating accounting policies for 2023/24 will be issued with Directive 5.

Disclaimer

This article reflects the views of the individual views of the author and is not an official view of the ASB or its Board.

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