UPDATE ON THE WORK OF THE ASSETS PROJECT GROUP
APPROVED STANDARDS OF GRAP

The Minister of Finance (Minister) has announced, in Government Gazette 31021 dated 9 May 2008, the effective date of the following Standards of GRAP that were completed by the asset project group and approved by the Accounting Standards Board (the Board) as final Standards of GRAP:

• The Standard of GRAP on The Effects of Changes in Foreign Exchange Rates (GRAP 4)

• The Standard of GRAP on Borrowing Costs (GRAP 5)

• The Standard of GRAP on Financial Reporting in Hyperinflationary Economies (GRAP 10)

• The Standard of GRAP on Construction Contracts (GRAP 11)

• The Standard of GRAP on Inventories (GRAP 12)

• The Standard of GRAP on Leases (GRAP 13)

• The Standard of GRAP on The Events After the Reporting Date (GRAP 14)

• The Standard of GRAP on Investment Property (GRAP 16)

• The Standard of GRAP on Property, Plant and Equipment (GRAP 17)

• The Standard of GRAP on Non-current Assets Held for Sale and Discontinued Operations (GRAP100)

• The Standard of GRAP on Agriculture (GRAP 101)

• The Standard of GRAP on Intangible Assets (GRAP 102).

The Board further approved the Standard of GRAP on Heritage Assets (GRAP 103) at its July 2008 Board meeting. The Minister still needs to determine the effective date for this Standard of GRAP.

APPROVED GUIDELINE

The Board, at its meeting held on 24 November 2008, approved the Guideline on Accounting for Public-private Partnerships (PPPs). As the Guideline incorporates principles from relevant Standards of GRAP, entities should apply the Guideline as and when the Minister determines the implementation dates of the applicable Standards of GRAP on which this Guideline is based.

EXPOSURE DRAFTS

Impairment of Assets

At the March 2008 Board meeting, the Board approved the exposure drafts of the Standards of GRAP on Impairment of Non-cash-generating Assets (ED 45) and Impairment of Cash-generating Assets (ED 46). Comment on these exposure drafts closed on 31 July 2008.

In addition, the secretariat also discussed the principles in the proposed Standards of GRAP with relevant stakeholders at workshops arranged in Kwa-Zulu Natal and in the Western Cape. Comment received during these workshops will also be considered in finalising the proposed Standards of GRAP.

Project group meetings are arranged in February 2009 to consider all the comment received. The proposed Standards of GRAP will then be submitted to the March 2009 Board meeting for the Board’s consideration and approval as final Standards of GRAP.

INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS BOARD (IPSASB)

Borrowing costs

The IPSASB decided to revise IPSAS 5 Borrowing Costs (issued May 2000) following its strategy to converge accrual basis IPSASs with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB). The IPSASB issued the revised IPSAS 5 Borrowing Costs for comment during September 2008. Comment on the IPSASB exposure draft is due on 7 January 2009.

The Board agreed to concurrently issue the IPSASB exposure draft. Comment on the concurrent exposure draft was due on 30 November 2008. The Board will consider the revised IPSAS, once it is issued by the IPSASB, in deciding whether the Standard of GRAP on Borrowing Costs (GRAP 5) should be revised.

Intangible assets and Agriculture

The IPSASB has commenced work on the development of proposed IPSASs dealing with intangible assets and agricultural activities. The Board will again issue these international exposure drafts concurrently to obtain comment from stakeholders in formulating a response to the IPSASB. There after, the Board will consider the final IPSASs in deciding whether the local Standards of GRAP should be revised.

Service Concession Arrangements

The IPSASB plans to discuss the first draft of an exposure draft dealing with service concessions at its June 2009 meeting. In addition to the normal concurrent local exposure draft of the international exposure draft, the Board will monitor the progress of the IPSASB exposure draft and assess the impact thereof on the local Guideline on Accounting for Public-private Partnerships (PPPs). After the IPSASB has finalised the IPSAS, the local due process for issuing a Standard of GRAP will be followed and the Guideline will be amended, where appropriate.


End: December 2008

Updates:

March 2009