Newly issued FAQs
IGRAP 18 on the Recognition and Derecognition of Land is effective for financial years commencing on or after 1 April 2019. Questions have been raised about whether land invasions or similar illegal occupations of land mean that an entity loses control of land when this occurs.
An FAQ was issued by the Secretariat in November 2019 explaining the effect of land invasions and illegal occupations on control. The broad considerations are as follows: The accounting for land is based on the rights that an entity is presently able to exercise in terms of its ownership of the land or other rights granted in terms of a binding arrangement. Where an entity controls land because of legal ownership - The invasion of land may be an illegal act. While the occupants may have certain rights, these rights do not supersede or eliminate the entity’s currently exercisable rights in terms of its legal ownership of the land. The fact that the entity may not execute these rights because of political, socio-economic or other factors, is irrelevant in establishing whether control exists for accounting purposes. These rights may however subsequently be changed through another legal action, such as the outcome of a court process such as the outcome of court case, court order, etc. Where an entity controls land because of rights to use land (other than through legal ownership) - When an entity controls land through other rights, it is likely that the entity would need legal advice as to the rights of the various parties. The FAQs can be accessed by following this link: http://www.asb.co.za/frequently-asked-questions/
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