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South Africa

Financial reporting framework in South Africa

The Financial Reporting Standards Council (FRSC) was formed in late 2011 and is the legally constituted standard-setter for South Africa.  Previously, the Accounting Practices Board, a private sector body consisting of a number of accounting and industry bodies, was empowered to issue accounting standards for use by South African companies.

The APB approved IFRS, without change, and approved the use of IFRS for SMEs where companies fall within the scope of that standard. It also issued interpretations that contain issues that are specific to the South African market generally only after discussion with the IASB confirming that it will not be addressing the issue as it is a country specific issue.

During its existence, the Accounting Practices Board issued a preface and four Interpretations being:

  • 501 Accounting for "Secondary Tax on Companies (STC)"
  • 502 Substantively Enacted Tax Rates and Tax Laws
  • 503 Accounting for Black Economic Empowerment (BEE) Transactions
  • 504 IAS 19(AC 116) The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction in The South African Pension Fund Environment.

Under regulations made under South African law promulgated in 2011, entities in South Africa are permitted to use either International Financial Reporting Standards (IFRS), the IFRS for SMEs, or South African Statements of Generally Accepted Accounting Practice (SA GAAP), depending on an entity's 'public interest score'.  The APB adopted IFRS standards as SA GAAP without amendment up until May 2011.

In March 2012 a number of decisions were made:

  • Withdraw SA GAAP, which would cease to apply in respect of financial years commencing on or after 1 December 2012
  • The FRSC will seek to obtain power to issue financial reporting pronouncements (FRPs) to take account of local South African circumstances or issues not specifically covered by IFRS or IFRS for SMEs, provided FRPs are not in conflict with IFRS or IFRS for SMEs
  • The APB will commence the process of its voluntary winding up.

 

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.