South Africa’s Financial Reporting Standards Council (FRSC) and Accounting Practices Board (APB) are set to withdraw SA GAAP for accounts reported from financial years commencing from 1 December 2012.
The APB will also be wound up and its standard-setting function will be the responsibly of the FRSC.
The decision to withdraw SA GAAP aims to reduce the burden of issuing IFRS as SA GAAP, which are now mostly redundant. In 2003, it was decided SA GAAP would be harmonised with IFRS and companies were able to use either IFRS, IFRS for SMEs or SA GAAP in specific instances.
In light of a recent withdrawal of US GAAP, South African institutes called for companies with a public interest score below 350 that are currently applying SA GAAP to prepare for the conversion to IFRS or IFRS for SMEs.
The FRSC will now take control of issuing financial reporting pronouncements that take account of local circumstances or issues not specifically covered by global standards.At present, differences between SA GAAP and IFRS occur in four IFRSs, seven amendments to IFRSs and an IFRIC which has not been issued as SA GAAP.
- IFRS 10 – Consolidated Financial Statements;
- IFRS 11 – Joint Arrangements;
- IFRS 12 – Disclosures of Interests in Other Entities;
- IFRS 13 – Fair Value Measurement;
- Amendments to IAS 27 – Separate Financial Statements;
- Amendments to IAS 28 – Investment in Associates and Joint Ventures;
- Amendments to IAS 19 – Employee Benefits;
- Presentation of Other Comprehensive Income: Amendments to IAS 1 – Presentation of Other Comprehensive Income (effective for annual periods beginning on or after 1 July 2012);
- Mandatory Effective Date and Transition Disclosures – Amendments to IFRS 9 –
- Financial Instruments and IFRS 7 – Financial Instruments: Disclosures;
- Offsetting Financial Assets and Financial Liabilities – Amendments to IAS 32 – Financial Instruments: Presentation;
- Disclosures – Offsetting Financial Assets and Financial Liabilities – Amendments to
- IFRS 7 – Financial Instruments: Disclosures; and
- IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine.