- Before a project commences, the Board considers the approved project brief to determine whether changes to the project brief are required based on changes in the environment.
- Depending on the nature of the topic, the development of a Standard of GRAP may be initiated by undertaking research and developing a Research Paper or Discussion Paper. Research is carried out to identify and review issues associated with the topic and to consider the application of the Conceptual Framework for General Purpose Financial Reporting1 to the issues. Accounting requirements, practices and standards issued by other national or international standard-setting bodies are also studied.
- Unlike Research Papers, Discussion Papers are published for comment, and their development follows the standard-setting process set out in the paragraphs below.
- Once research is complete, the Board develops the pronouncement based on the project brief. The Board’s considerations on the nature of the pronouncement developed are discussed in section 4.
- The Board identifies which stakeholders should be consulted during the development of the proposed Standard of GRAP (or other pronouncement).
- Focused stakeholder consultations are facilitated through project groups. Project groups members comprise of preparers, auditors, users, consultants, academics, and other interested parties.
- Project group members volunteer to participate in the project group meetings based on the following considerations:
- commitment to the Board objectives;
- technical knowledge;
- ability to consider the practical aspects of issues being considered; and
- ability to influence the adoption of Standards of GRAP and the building of consensus on the Board’s positions.
- The project group assists the Secretariat by reviewing draft pronouncements and making recommendations to the Technical Committee. Minutes of meetings are recorded.
- Depending on the project, it may be necessary for separate meetings to be held with specific stakeholders (including experts) identified in the project brief. Feedback from these meetings is also considered by the Technical Committee.
- The Exposure Draft of the proposed Standard of GRAP (or other pronouncement) is reviewed by the Technical Committee and specific issues identified by the project group are discussed. The Technical Committee makes recommendations for the Board to approve the Exposure Draft.
- The Board considers the key issues and recommendation of the Technical Committee, and if appropriate, approves the Exposure Draft for issue.
- The comment period of the Exposure Draft is considered by the Board. Exposure Drafts are issued for a minimum period of three months. However, depending on the nature and complexity of the pronouncements the Board may shorten or extend the comment period up to six months.
- The Board consults widely and encourages public participation throughout the standard-setting process. The proposed Standard of GRAP (or other pronouncement) is exposed for public comment. This provides an opportunity for those affected by the Board’s pronouncements to present their views before the pronouncements are finalised and approved by the Board.
- Exposure Drafts are issued in English only. The Exposure Drafts are published on the ASB’s website and notice of the publication is given in the Government Gazette.
- The Board undertakes the following types of targeted consultation with stakeholders:
- education sessions are held in advance of roundtable discussions to present proposals in an Exposure Draft;
- roundtable discussions to seek specific engagement with, and comment from, stakeholders; and
- direct consultation with stakeholders, either through meetings or presentations.
- The written and verbal comments received are documented. All comments are public information unless respondents request them to be confidential.
- Once the comment period ends, the Secretariat analyses and summarises the written and verbal comments and provides that analysis and summary for the project group and Technical Committee to review.
- The project group assists the Secretariat by reviewing comments received, draft pronouncements and making recommendations to the Technical Committee. Minutes of meetings are recorded.
- Based on feedback received from the focused stakeholder consultation, amendments are made to the proposed Standard of GRAP (or other pronouncement) before they are considered by the Technical Committee.
- The Technical Committee considers all comments received on Exposure Drafts and makes recommendations to the Board for modifications as it considers appropriate. The Technical Committee makes recommendations for the Board to approve the Exposure Draft.
- The draft of a Standard of GRAP (or other pronouncement), with proposed modifications, and key issues identified during consultation, are submitted to the Board for consideration and approval. The Board also considers whether affected stakeholders were consulted, and if the consultation was sufficient.
- If there are significant changes to the Standard (or another pronouncement) under consideration, or unresolved issues remain, the Board may decide to re-issue a revised Exposure Draft. Section 7 outlines the criteria and process to assess whether the amended pronouncement should be re-exposed for further public consultation.
- The Board approves the Standard of GRAP (or other pronouncement).
- For the purposes of approving a pronouncement of the Board, each Board member (except ex-officio Board members) represented on the Board has one vote. A simple majority of Board meetings is required for a quorum. Approval of Standards of GRAP, Interpretations of the Standards of GRAP, issuing of Directives and Guidelines require at least two thirds of the total voting rights present at a meeting before the pronouncement is published and released. Other pronouncements and Exposure Drafts are approved by at least much of the total voting rights present at a meeting.
- Once approved, the final Standard of GRAP (or other pronouncement) and final summaries of comments received are published on the ASB’s website. Where confidentiality was requested by respondents, these comments will not be published on the ASB’s website. Depending on the nature of the pronouncement, the Board determines the transitional provisions and effective dates.
- The Board develops Directives to set transitional provisions and transitional arrangements for the entities that apply Standards of GRAP.
- The Board facilitates compliance with Standards of GRAP using transitional provisions. Where transitional provisions exist, they may allow an entity additional time to meet the full requirements of, or provide relief from, certain requirements when initially applying a Standard of GRAP.
- For the periods in which an entity takes advantage of additional time or specific exemptions granted in any transitional provision, disclosure of this fact is required in the financial statements.
Transitional provisions for different entities
- Legislation requires the Board to consider the capacity of entities to implement the Standards of GRAP. The Board may deem it appropriate to grant additional time to certain entities or types of entities that may not have sufficient capacity to implement the Standards on their effective date.
- As a result, the Board may develop transitional provisions for specific categories of entities established based on the accounting and financial reporting framework previously applied by those entities, as well as whether those entities possess adequate capacity to implement the requirements of the Standards of GRAP.
Transitional provisions to Standards of GRAP
- The Board develops the proposed transitional provisions for Standards of GRAP and amendments to Standards of GRAP. For newly issued Standards, a separate Exposure Draft is developed for the proposed transitional provisions and issued for comment. For amendments to Standards, the Board decides whether to propose transitional provisions as part of the initial Exposure Draft outlining the amendments to the Standard, or as a separate Exposure Draft.
Transitional provisions to Interpretations of the Standards of GRAP
- Where applicable, transitional provisions that apply to the initial adoption of the Interpretations of the Standards of GRAP, will be included in the Interpretation.
- Legislation requires the Board to recommend implementation dates (i.e., effective dates) of Standards of GRAP to the Minister of Finance.
- The effective date is usually set as one year from the beginning of the next reporting period. The Board may recommend that a longer effective date is appropriate having considered:
- transitional provisions that provide entities a period of time to comply with the requirements of a Standard; and/or
- other factors, such as the timing of other reforms, the significance of changes that may be required to current accounting policies or systems, etc.
- The level of approval of effectives dates depends on the nature of the pronouncement.
New Standards of GRAP
- The effective date of newly issued Standards of GRAP is determined by the Minister of Finance based on the Board’s recommendation and after consultation with the AGSA and OAG. The proposed effective date is agreed with the trilateral parties2 to identify any policy reforms or other strategic issues that may affect the adoption of the Standard in the various spheres of government.
Amendments to Standards of GRAP
- The Board discusses the effective date when the amendments to existing Standards of GRAP are approved for issue.
- The proposed effective date is agreed upon by the trilateral parties before a submission is made by the Board to the Minister of Finance.
Interpretations of the Standards of GRAP
- Interpretations of the Standards of GRAP are effective when the Standards of GRAP to which they relate are initially adopted.
- If a Standard of GRAP is already effective and the Board issues an Interpretation of that Standard, the Board determines the effective date and specifies the date in the Interpretation before being published.
- As Interpretations of the Standards interpret the principles of Standards – some of which may have already been implemented by entities – there may be a need to set an earlier effective date than that identified for Standards. The effective date could be shorter than the norm of one year from the beginning of the next reporting period.
- The effective date is usually set as one year from the beginning of the next reporting period. Interpretations should however, generally, be available at least one year prior to them becoming effective (if the Standard(s) of GRAP it interprets is effective). A longer or shorter effective date may be appropriate when considering other factors, such as the timing of other reforms, the significance of changes that may be required to current accounting policies or systems, or whether there is an urgent need to clarify the application of the principles of Standards of GRAP that are already being applied.
- The Board applies the same principle to amendments made to Interpretations of the Standards of GRAP.
- Where Directives prescribe transitional provisions for the Standards of GRAP issued by the Board, the Directives become effective when the applicable Standards of GRAP are approved for implementation by the Minister of Finance, in accordance with:
(a) legislation governing those entities; or
(b) the authority provided by another Minister (whichever is relevant).
- In the case of other Directives not prescribing transitional provisions, the Board determines the effective date when that Directive is being approved for issue.
- Guidelines do not have effective dates.
- The Board may decide to make the application of a Guideline mandatory and follows the same process followed for determining effective dates of Interpretations of the Standards of GRAP. In such cases, the Guideline will form part of the GRAP Reporting Framework for entities to consider in preparing their financial statements for a for a particular period.
Transitional provisions and effective dates to Standards of GRAP
- The process for developing and consulting on the Exposure Draft for the proposed transitional provisions and effective dates is the same as other pronouncements issued by the Board (i.e., Phase I to VI).
- The proposed effective date and transitional provisions are communicated to the ASB’s stakeholders in the Exposure Draft outlining the proposed transitional provisions when they are issued as part of the Board’s public consultation process. Stakeholders will be requested to provide feedback on the proposed effective date and identify any other issues that should be considered in implementing the Standard.
- The Board considers the comment received, and the final transitional provisions are added in the applicable Directives by way of a consequential amendment to that Directive. A submission is made by the Board to the Minster of Finance that sets out the proposed effective date.
- If any comments are received during the public consultation on the proposed transitional provisions that may indicate that the proposed effective date is inappropriate, the Board proposes a revised date to the trilateral parties. The trilateral parties agree on the proposed effective date before a formal submission is made by the Board to the Minister of Finance. The final date approved by the Minister of Finance is published in the Government Gazette.
- The Board monitors the application and implementation of the Standards of GRAP (or other pronouncements) through:
- Post-implementation reviews of selected Standards.
- Desktop or similar reviews of specific issues.
- Discussion with preparers, firms, consultants and other interested parties at the PSAF, outreach events and liaison with the OAG and AGSA.
- The Board undertakes a post-implementation review to review the implementation of a Standard of GRAP by consultation with preparers, auditors and/or users of financial statements to:
(a) assess whether the Standard of GRAP achieved the intended outcome; and
(b) identify difficulties experienced in applying the Standard consistently across all spheres of government.
Section 9 outlines the Board’s approach to undertaking post-implementation reviews.
- A desktop review is the review of the application of a Standard of GRAP, part of a Standard, or another topic reported in the annual financial statements of entities prepared in accordance with Standards of GRAP. Section 10 outlines the Board’s approach to undertaking desktop reviews.