Download: Grant Thornton IFRS News: Q2 2013

Our second edition of 2013 starts with a detailed look at the IASB’s new proposals on accounting for the impairment of financial instruments before considering other items in the IASB’s ‘pipeline’.

We then go on to IFRS-related news at Grant Thornton before turning to a more general round-up of financial reporting developments relevant to IFRS preparers. We finish with the implementation dates of newer standards that are not yet mandatory and a list of IASB publications that are out for comment.

About IFRS News
IFRS News offers a summary of the more significant developments in International Financial Reporting Standards (IFRS) along with insights into topical issues and comments and views from the Grant Thornton International IFRS team.

The IFRSNews quarter 3 edition of 2012 starts with a look at how work is progressing on the main IFRS and US GAAP convergence projects, before focussing in detail on the new Standards that have been published in the last quarter and the documents the IASB has issued for public comment.

Some of the highlights in this edition include:

• IFRS and US GAAP update
• Effective dates of new standards and IFRIC interpretations
• 2010-2012 Annual Improvements exposure draft published
• Findings from Canada’s transition to IFRS.

Our second quarter edition of IFRS News 2012 starts by looking at the IASB’s revised work plan and the projected targets for the documents it expects to issue later this year. We go on to consider some issues arising from current economic conditions that may affect companies using IFRS.

We have also included a more general round-up of activities affecting the IASB, and the implementation dates of newer Standards that are not yet mandatory.

Some of the highlights in this edition include:

• The IASB’s revised work plan
• IASB and FASB seek to reduce differences in financial instrument accounting
• IFRS issues related to current economic conditions
• IASB amends IFRS 1 for government loans
• SME Implementation Group publishes two final Q&As
• Comment letter on revenue recognition

The preparation of financial statements in accordance with International Financial Reporting Standards (IFRS) is challenging. The challenges have increased as a result of applying new Standards and Amendments published by the International Accounting Standards Board (IASB) that significantly impact both the presentation of the primary statements and the accompanying disclosures.

Example interim consolidated financial statements 2012 and Example consolidated financial statements 2011 reflects the collective experience of Grant Thornton International’s IFRS team and member firm IFRS experts, and is intended to provide a realistic example of their presentation.

• The example consolidated financial statements 2011 reflect changes in IFRS that are effective for the year ended 31 December 2011
• The interim consolidated financial statements 2012 reflect changes in IFRS that are effective for the year ended 31 December 2012

Downloads:

• IFRS News Q2 2012
• Example interim consolidated financial statements 2012
• Example consolidated financial statements 2011

The preparation of financial statements in accordance with International Financial Reporting Standards (IFRS) is challenging. The challenges have increased as a result of applying new Standards and Amendments published by the International Accounting Standards Board (IASB) that significantly impact both the presentation of the primary statements and the accompanying disclosures.

‘Example Interim Consolidated Financial Statements 2012’ reflects the collective experience of Grant Thornton International’s IFRS team and member firm IFRS experts, and is intended to illustrate the ‘look and feel’ of IFRS interim financial statements and to provide a realistic example of their presentation.

The publication reflects changes in IFRSs that are effective for the year ending 31 December 2012. This publication also reflects the early-adoption of ‘Presentation of items of other comprehensive income’ (Amendments to IAS 1) which is effective for annual periods beginning on or after 1 July 2012.

Download: Example Interim consolidated financial statements 2012

The Act provides for two categories of companies, namely for profit and not for profit companies.

Close corporations continue to exist but no new close corporations can be registered post the implementation date of the new Companies Act, being 1 May 2011.

For profit companies

• State-owned Companies (name ends in “SOC Ltd”)
• Public Companies (name ends in “Ltd”)
• Private Companies (name ends in “(Pty) Ltd” or “Proprietary Limited”)
• Personal Liability Companies (name ends in “Incorporated” or “Inc”)
• For profit companies may be incorporated by one or more persons, except for a state-owned company which may also be incorporated by an organ of state.

Not for profit companies

• a not for profit business (name ends in “NPC”) – previously known as a Section 21(b) company under the Act of 1973
• not for profit companies may be incorporated by three or more persons acting together, an organ of state or by a legal entity.

Annual financial statements

• annual financial statements must be prepared within six months of the financial year end and annual returns must be filed within 30 business days after the anniversary date of incorporation
• the annual financial statements of state-owned companies and public companies must be audited at all times
• annual financial statements of private companies and personal liability companies only require to be audited if:
• the company holds assets for another party in excess of R5 million; or
• the public interest score is 350 or more; or
• the public interest score is 100 or more and the annual financial statements are internally compiled; or
• it is required by the Memorandum of Incorporation or by a shareholder’s or director’s resolution or in terms of an agreement
• in certain instances an independent review of the annual financial statements will be required
• the annual financial statements of non-profit companies only require to be audited if:
• the company holds assets for another party in excess of R5 million; or
• it was incorporated by the state, an international entity, foreign state entity or foreign company; or
• it was incorporated to perform a statutory, regulatory or public function.
• if an audit is not required, the company must have its annual financial statements independently reviewed.

Public interest score
Every company must calculate its public interest score for each financial year.

This is determined as the sum of:

• a number of points equal to the average number of employees during the financial year; and
• one point for every R1 million in third party liability at year end; and
• one point for every R1 million in turnover; and
• one point for every individual who directly or indirectly has a beneficial interest in any of the company’s securities.

External companies
An “external company” is defined as a foreign company that is carrying on business, or non-profit activities, as the case may be, within South Africa, if such a company is party to one or more employment contracts within South Africa, or is engaging in a course or pattern of activities within South Africa over a period of at least six months, which would lead a person to reasonably conclude that the company intended to continually engage in business or non-profit activities within South Africa.

An “external company” must register with the Commission within 20 business days after it first begins to conduct business, or non-profit activities, as the case may be, within South Africa.

The following must accompany Form CoR 20.1 during the registration process:

• the filing fee
• a certified copy of the company’s Memorandum of Incorporation, or similar document filed in the jurisdiction in which the external company is registered, together with a translation of the document if required
• the certificate of incorporation or comparable document issued by the jurisdiction in which the company was incorporated, together with a translation of the document if required
• the address of its principal office outside South Africa and the names of its directors at the time the form is filed
• the address of its registered office in South Africa and the name and address of the person within South Africa who has consented to accept service of documents on behalf of the external company.

Domesticated companies
A “domesticated company” is defined as a foreign company whose registration has been transferred to South Africa and which will thereafter exists as a company in terms of this Companies Act as if it had been originally so incorporated and registered.

This publication provides a summary of recent changes to IFRS – it covers new Standards and Interpretations that have been issued and amendments made to existing ones – that will affect companies’ future financial reporting. It is designed to give Chief Financial Officers a high-level awareness of the requirements of changes that were finalised by 30 November 2011, giving brief descriptions of each.

The publication now covers 31 March 2011, 30 June 2011, 30 September 2011, 31 December 2011 and 31 March 2012 financial year ends.

How to use the publication
The publication is designed to help entities planning for a specific financial reporting year end identify: changes mandatorily effective for the first time, changes not yet effective and/or changes already in effect.

Identifying the commercial significance of the changes in the publication
For each change covered in the publication, we have included a box on its commercial implications. These sections focus on two questions: How many entities will be affected? What will be the impact on affected entities?

A traffic light system indicates our assessment of the answers to these questions.

Download: Navigating the changes to International Financial Reporting Standards: a briefing for Chief Financial Officers

The preparation of financial statements in accordance with IFRS is always challenging. Recently the challenges have been increased by several newer standards and amendments that have a significant impact both on the presentation of the primary statements and the accompanying disclosures.

‘Example consolidated financial statements 2011′ illustrates good practice in the application of the presentation and disclosure requirements of IFRS. This publication has been reviewed and updated to reflect changes in IFRS that are effective for the year ending 31 December 2011.

Download: Example consolidated financial statements 2011

The calculator is provided for guidance purposes only. Grant Thornton does not accept any responsibility for the incorrect use of the calculator or for any actions taken based on the outcome thereof. It remains the responsibility of the user to verify the outcome of the score prior to making any decisions based thereon. For further information, please contact us.