Newly issued Frequently Asked Questions
The ASB issued new FAQs in May and June 2020. The FAQs are issued by the Secretariat of the ASB and not the ASB Board. The new FAQs deal with the following topics.
How do statutory receivables arise?
Stakeholders have raised questions about how to assess whether a receivable arises from a contract or a statutory arrangement such as legislation, supporting regulations, or similar means, e.g. ministerial directives, and municipal by-laws. The questions arose because many activities undertaken in the public sector are regulated by legislation, supporting regulations or similar means.
FAQ 10.1 explains that entities need to analyse transactions by considering whether: The individual transaction between the entity and the counter party is initiated as a result of legislation, supporting regulations or similar means, OR whether it is governed (i.e. regulated) by legislation or similar means but initiated by a contract. For example:
Electricity distribution and the tariffs charged are governed by legislation, supporting regulations or similar means, but the actual provision of electricity by a municipality to a consumer is governed by a contractual arrangement.
The transactions are compulsory or not. Contractual arrangements are voluntary transactions between parties, while statutory arrangements are compulsory. What is the interaction between GRAP 11 on Construction Contracts and the Guideline on Accounting for Arrangements Undertaken in terms of the National Housing Programme?
Entities are required to present and disclose information on revenue from exchange and non-exchange transactions separately. FAQ 6.12 explains the classification of revenue, specifically conditional grants received by municipalities, when they are project developers in housing arrangements.
Other changes to the FAQs
The existing FAQs on the GRAP reporting framework have been updated, and a number of archived FAQs have been reinstated.
The FAQs can be accessed on the ASB’s website by following this link: https://www.asb.co.za/frequently-asked-questions/ |
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