South Africa standard-setting arrangements change, 'SA GAAP' to be discontinued
Standard setting arrangements in South Africa are undergoing change, with the South African Accounting Practices Board (APB) to be wound up and its functions effectively transferred to the recently created Financial Reporting Standards Council (FRSC). As part of the changes, the use of South African Statements of Generally Accepted Accounting Practice (SA GAAP) is to be discontinued.
Under recent changes to the companies law in South Africa, the FRSC was established in late 2011 as the legally constituted standard-setter for South Africa. The APB was previously the recognised standard-setter and began the process of harmonising SA GAAP with International Financial Reporting Standards (IFRS) in 2003. The APB subsequently decided to adopt IFRS standards as SA GAAP without amendment (only until May 2011), but also issued additional guidance in the form of interpretations of SA GAAP. Prior to the current developments, SA GAAP was permitted to be applied by certain entities depending on a 'public interest score'.
Under the changes, SA GAAP will cease to apply in respect of financial years commencing on or after 1 December 2012. Entities previously applying SA GAAP will be required to apply either IFRS (applying the transitional requirements of IFRS 1 First-time Adoption of International Financial Reporting Standards) or the IFRS for SMEs. It is also proposed that the FRSC will be given power to issue 'financial reporting pronouncements' (FRPs) to take account of local circumstances or issues not specifically covered by IFRS or the IFRS for SMEs, provided they are not in conflict with IFRS or the IFRS for SMEs.
Click for Joint APB-FRSC statement (link to South African Institute of Chartered Accountants website).