The Financial Surveillance Department of the South African Reserve Bank has issued the following Exchange Control Circular:
No. 8/2011 Amendments to the Exchange Control Rulings
Replacement pages of the amended Exchange Control Rulings can be requested from SAICA through our query system on www.saica.co.za.
Dates for Tax season 2011 for individuals and Trusts Announced
The dates for individual taxpayers and trusts to submit their 2010/11 annual income tax returns have been announced. The dates are as follows:
1 July 2011 Submission period opens for all taxpayers.
30 September 2011 Manual Submission deadline for all taxpayers.
25 November 2011 Electronic submission deadline for non-provisional tax.
31 January 2012 Electronic submission deadline for provisional tax.
Company returns are due within 12 months from the financial year end.
Withdrawal of Circular 7/2004
At its meeting held in May 2011, the SAICA Accounting Practices Committee (APC) decided to withdraw Circular 7/2004 Status and effective dates of statements of Generally Accepted Accounting Practice (GAAP) and interpretations of statements of GAAP, effective immediately. This Circular was issued in 2004 to address Statements, revised and improved Statements that were effective from 1 January 2005 and with the changes in International Financial Reporting Standards and Statements of (GAAP) since then, the Circular has become outdated.
New Accounting Guide for Share Block Companies Issued
Accounting by share block companies has been the subject of much debate in recent years. After lengthy consultations, a Guide has been issued by the APC. This guide deals with the recognition and measurement requirements for assets and liabilities and the accounting for income and expenses.
The statement of comprehensive income reflects the fact that the share block company is acting as a principal and not an agent of the members, the statement of financial position will not reflect a property as an asset (because it is not probable that future economic benefits will flow to the share block company itself). The Guide is effective immediately and we therefore recommend that auditors and companies consider the implications thereof.
The Guide on Financial Reporting by Share Block Companies can be downloaded from the SAICA website www.saica.co.za.
The future of SA GAAP
The Accounting Practices Board (APB) held its first meeting for 2011 on 27 May 2011. At this meeting, the APB decided that it should assess the need for South African Statements of (SA GAAP) in its current form going forward in light of the Companies Regulations 2011, which refer to International Financial Reporting Standards (IFRSs) and International Financial Reporting Standard for Small and Medium-sized Entities (IFRS for SMEs), along with SA GAAP, which is effectively a replica of IFRS, prior to approving the IFRSs tabled before it.
In its assessment, the APB will also consider the Treasury Regulations that are issued in terms of the Public Finance Management Act, No.1 of 1999 (PFMA), that require some state-owned entities to apply SA GAAP and the fact that the financial reporting standards prescribed in the Companies Regulations 2011 are currently only applicable to financial years commencing on or after 1 May 2011. The APB will engage with relevant stakeholders in arriving at its conclusions. The decision to approve six of the eight IFRSs as SA GAAP or revised SA GAAP tabled at the meeting was postponed pending the outcome of the assessment.
In the interim, it is important to note that entities currently applying SA GAAP need to start considering what is their public interest score (as defined in the Companies Regulations 2011) and, resulting therefrom, which financial reporting framework they are permitted and wish to apply. SA GAAP is a replica of IFRSs, but does not require the application of IFRS 1(AC 138) First-time Adoption of International Financial Reporting Standards. Thus these entities need to start thinking about the implications of converting to IFRS, or IFRS for SMEs, once SA GAAP is no longer available for use; and the impact of first-time adoption of either of these frameworks. The APB also wishes to alert companies presently using SA GAAP that they might not be able to continue using SA GAAP in the future, even if SA GAAP is not discontinued.
The six IFRSs that the APB postponed approving were four new IFRSs and two revised IFRSs issued by the International Accounting Standards Board (IASB) in May 2011, all of which are effective for annual periods beginning on or after 1 January 2013. These new and revised IFRSs include IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosures of Interests in Other Entities, IFRS 13 Fair Value Measurement, IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures.
As the effective dates of the standards noted below are before
1 January 2013, the APB approved the following pronouncements that were issued by the IASB in December 2010:
Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters Amendments to IFRS 1(AC 138) First-time Adoption of International Financial Reporting Standards.
Withdrawal of SIC-21(AC 421) Income Taxes Recovery of Revalued Non-depreciable Assets. The publication of Deferred Tax: Recovery of Underlying Assets resulted in the withdrawal of SIC-21 and as a result SIC-21(AC 421) was also withdrawn as an Interpretation of SA GAAP effective for annual periods beginning on or after 1 January 2012.
The IASB press release of the amendments to IAS 12(AC 102) Income Taxes and IFRS 1(AC 138), the amendments and more detailed information on this APB decision can be found on the SAICA website www.saica.co.za. asa