Update on status of the Framework
The working group, including IRBA, met on 24 March and reached consensus on the major areas of contention. A task group was set up to amend the Standard and met on 26 May to review the reworked chapters 1 - 5 and the new Chapter 10 (Statement of Fair Values). Chapters 6 - 9 was reviewed on 30 June. Due to changes made on the Exposure Draft, the ED will be released by end-July for comments with a comment deadline of 17 September 2010. The revised statement will only be presented approval at a APB meeting to be scheduled in November.
Background
Currently in South Africa, a public/widely-held company must apply SA GAAP (IFRS). A private/ limited-interest company or a widely-held company that has not issued securities to the public and/or does not hold assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses, may apply SA GAAP: IFRS for SMEs.
A working group comprising a wide range of interested parties (including preparers and users of Financial Statements of non-public entities) issued an exposure draft entitled “Proposed Framework for Non-public Entities” for public comment in February 2009. The exposure draft was reissued for comment during February 2010 and the comment period ended on 28 February 2010. Currently the working group is updating the document based on the comments received.
The revised exposure draft of the “Reporting Framework for Non-public Entities” (RFfNPEs) provides a simpler reporting framework (numbering about ¼ of the pages of IFRS for SMEs), alleviating the reporting burden in, inter alia, the following key areas:
- No consolidation required
- Historical cost throughout (fair value disclosure discretionary)
- Finance leases need not be capitalised
- Tax depreciation rates can be applied (NOT accelerated allowances)
- No requirement to account for employee share options
- No requirement for the straight-lining of leases
Detailed Information