Accrual accounting standards for the public sector presented by amanda botha project manager asb
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Accrual accounting standards for the public sector presented by amanda botha project manager asb

Accrual accounting Standards for the public sector

Presented by:

Amanda Botha

Project manager: ASB


Disclaimer
Disclaimer

The views and opinions expressed in this presentation are those of the individual. Official positions of the ASB on accounting matters are determined only after extensive due process and deliberation


Objective of setting accrual accounting standards
Objective of setting accrual accounting Standards

  • Section 216 of the Constitution

  • Objective is to provide informationtousers of general purpose f/s to:

    • assess stewardship

    • decision making


Materiality
Materiality

  • Materiality:

    • Its omission, misstatement on non-disclosure could influence user’s decisions on the basis of financial statements

  • Standards of GRAP only apply to material items


Deemed cost
Deemed cost

  • Directive 7 Application of Deemed Cost on the Adoption of Standards of GRAP

  • When can an entity use Directive 7

    • Acquisition cost not available on adoption of GRAP

    • Deemed cost fair value on date of adoption


How does grap 17 contribute to the big picture
How does GRAP 17 contribute to the big picture?

  • All [material] assets are reflected on f/s(faithful representation of financial position)

  • Relevant, reliable measurement of asset values (initially and subsequently)

  • Use of assets reflected appropriately in determining surplus or deficit

  • Maintenance/upgrades of assets accounted for appropriately


Ppe registers
PPE registers

Asset register has information on:

  • Cost & components of cost

  • Additions, disposals, work-in-progress

  • Date of acquisition

  • Useful life and changes

  • Impairment

  • Changes in fair value (revaluation)

  • Fully depreciated assets still in use


Grap simplification
GRAP Simplification

Discussion Paper 5

  • Comparison of Standards of GRAP to IFRS for SMEs

  • Questioned whether Standards-level simplifications could be made using IFRS for SMEs as basis


Grap simplification1
GRAP Simplification

Amendments to asset related GRAPs:

  • GRAP 5 – expensing borrowing costs

  • GRAP 100 – review in its entirety

  • GRAP 17 + 102

    • Review residual values, useful lives and depreciation methods using indicator based approach

    • Componentise assets based on different useful lives


Grap simplification2
GRAP Simplification

  • Improvements Project 2011:

    • Disclosure of temporarily idle PPE

    • Clarify “significant use” when classifying property

  • Retain measurement alternatives


In conclusion
In conclusion

  • GRAP standards are important for:

    • improving management information and decision making

    • stimulating public analysis and debate of government’s finances

    • their contribution to an effective monitoring and evaluation system

    • contribute to providing a better life for all


Contacts
Contacts

www.asb.co.za

[email protected]

011 697 0660 (office)

011 697 0666 (fax)


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