1. Accrual accounting Standards for the public sector Presented by: Amanda Botha Project manager: ASB

2. 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

3. Objective of setting accrual accounting Standards Section 216 of the Constitution Objective is to provide information to users of general purpose f/s to: – assess stewardship – decision making

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. GRAP Simplification Improvements Project 2011: –Disclosure of temporarily idle PPE –Clarify “significant use” when classifying property Retain measurement alternatives

11. 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

12. Contacts www.asb.co.za Info@asb.co.za 011 697 0660 (office) 011 697 0666 (fax)