Many insurance companies applied the temporary exemption from IFRS 9 Financial Instruments to continue applying IAS 39 Financial Instruments to account for their financial instruments. This was available to entities using IFRS 4 Insurance Contracts until they converted to the new standard IFRS 17 Insurance Contracts. IFRS 17 is effective for years beginning on or after 1 January 2023, the...
The end to a much-appreciated relief: Temporary exemption from IFRS 9
Many insurance companies applied the temporary exemption from IFRS 9 Financial Instruments to continue applying IAS 39 Financial Instruments to account for their financial instruments. This was available to entities using IFRS 4 Insurance Contracts until they converted to the new standard IFRS 17 Insurance Contracts. IFRS 17 is effective for years beginning on or after 1 January 2023, the application thereof effectively eliminates the temporary exemption. All companies that apply IFRS 17 to account for their insurance or reinsurance contracts must apply IFRS 9.Read more
IAS 12 Initial recognition exemption – What is the purpose?
No one enjoys accounting for deferred tax. It can be confusing and, more often than not, a frustrating process. So, when there is an exemption to recognising deferred tax, reporting entities usually jump at the chance. Exemptions can, however, cause their own problems, especially when they are not applied properly.Read more
Headline earnings per share clarification
All JSE-listed entities are required to present this number and its related reconciliation to earnings per IAS 33 Earnings per Share (IAS 33) in their financial reports as the JSE believe there is still a large demand from users in general for a clearly defined reference number which can be used for reporting and comparative purposes.Read more
IFRS 16 Supplier Substitution Rights
When assessing whether a contract is a lease one must always consider if the owner of the asset has substitution rights, but what does this mean and how does it play out?Read more
How sustainably ready are you?
On June 26, 2023, the International Sustainability Standards Board (ISSB) made a significant announcement by issuing its first-ever global sustainability disclosure standards, launching them in South Africa on 29 June 2023. These standards, comprise IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and IFRS S2 Climate-related Disclosures (IFRS S2), which aim to enhance transparency and trust in company disclosures pertaining to sustainability. Their implementation is expected to play a pivotal role in aiding investment decisions where sustainability-related risks and opportunities are reasonably expected to affect an entity’s prospects.Read more
Amendments to IAS 7 and IFRS 7: Supplier finance arrangements
The IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to cater for supplier finance arrangements.Read more
Amendments to Income Taxes Standards (IFRS and IFRS for SMEs): International Tax Reform - Pillar Two Model Rules
The International Accounting Standards Board (IASB) recently issued amendments to IAS 12 Income Taxes (IAS 12). The Organisation for Economic Co-operation and Development’s (OECD) international tax reform creates accounting implications leading to the recognition deferred tax assets and liabilities. The amendments give companies temporary relief from these accounting implications.Read more
Limitation of assessed losses – Section 20 of the Income Tax Act N0.58 of 1962 (“IT Act”)
In the 2020 Budget Review the Minister of Finance, Enoch Gondwana, announced a reduction in the corporate tax rate. The reason for the deduction as explained by the Minister of Finance was to improve the country’s competitiveness, reduce the appeal of base erosion and profit shifting, encourage investment and promote economic growth. In this regard, the international trend applied with regards to a reduced tax rate is to restrict the application of assessed losses in order to maintain a revenue neutral effect.Read more
Revenue recognition: Complex complexities
Complex living has become very popular due to the perceived safety and affordability. Complexes range from apartments to estates to retirement villages; we all know someone who is in, was in, or is moving into, one, if not ourselves.Read more
Summary of proposed amendments to IFRS 9/IFRS 7
The IASB has issued an exposure draft (‘ED’) with proposed amendments to IFRS 9 Financial Instruments (‘IFRS 9’) and IFRS 7 Financial Instruments: Disclosures (‘IFRS 7’) following feedback received during the Post-implementation Review (‘PIR’) of IFRS 9 Classification and MeasurementRead more