SOUTH AFRICAN

REPORTING
REQUIREMENTS

CHAPTER 1

1
 STUDY OBJECTIVES:

SOUTH AFRICAN REPORTING

REQUIREMENTS

2 SOUTH AFRICAN • Sources of authority for SA financial reporting

• Companies Act 71 of 2008
REPORTING
JSE REQUIREMENTS FOR LISTED
REQUIREMENTS COMPANIES

INTRODUCTION TO THE KING

REPORT REQUIREMENTS

OTHER REQUIREMENTS IN SA
REPORTING
3 SOUTH AFRICAN REPORTING
REQUIREMENTS

Companies Act JSE Listing

REFERENCES:
71 of 2008 Requirements

FRSC
Pronouncements/ King 4
IFRS
1. BACKGROUND

SOUTH AFRICAN REPORTING FRAMEWORKS

REPORTING FRAMEWORKS

‘Full’ IFRS for SMEs A Guide for

IFRS entities with Micro-Sized Entities
‘no public applying
accountability’ IFRS for SMEs
5 CATEGORIES OF SOUTH AFRICAN
REPORTING REQUIREMENTS

Conceptual IFRS & IAS

Framework Series

FIVE categories
of SA Financial
Reporting
Pronouncements
FRP/G
IFRIC & SIC Series (SA
Series issues)

SAICA
Circulars
6 SOURCES OF AUTHORITY FOR SOUTH
AFRICAN REPORTING REQUIREMENTS

IFRSs

3 SOURCES
OF
AUTHORITY
STATUTE:
Companies JSE
Requirements
Act
 1. Salient aspects to Companies Act 71 of 2008:
 has 9 chapters, 225 sections
2. STATUTORY  Memorandum of Incorporation (MOI)
FINANCIAL  what about Close Corporations (CCs)?
REPORTING  extensive accountability and transparency
REQUIREMENTS provisions

COMPANIES  establishes the Financial Reporting Standards

Council (FRSC)
ACT 71 OF 2008  Companies and Intellectual Property
Commission (CIPCO) – purpose?
2. No par/nominal value shares (but ‘old’ companies may
retain par value shares)
 Section 28 of the Companies Act 2008 requires ALL companies
to keep the prescribed accounting records

2. COMPANIES
ACT 71 OF 2008 Section 29 requires ALL companies to prepare annual financial
statements

S 29 provides for the regulation of financial reporting standards

allows for different standards for:
to promote sound and consistent accounting standards must be • profit and non-profit companies
accounting practices consistent with IFRSs of the IASB • different categories of profit companies
 Regarding the audit of companies:

or others may have to be

section 30 sets out the some companies may
independently reviewed,
requirements for want to be voluntarily
based on turnover,
9 2.
statutory audits audited
COMPANIES number of employees, etc

ACT 71 OF 2008

Companies Regulations 2011 sets out financial reporting

standard required for categories of companies,

depends on category of company, also based on public interest score (PI

whether listed and whether scoping Score). Refer table in Chapter 1, page 3/4
requirements of IFRS for SMEs met of text
10
2.1 COMPANIES ACT 71 OF 2008 –
REPORTING REQUIREMENTS
Effective 1 May 2011
Provides for 2 types of companies

Profit companies Non-profit companies

• public co (Ltd) (NPC)
• private co Have a public benefit
((Pty) Ltd) object or relate to
• personal liability co (Inc) cultural/ social
• state-owned co activities
(SOC Ltd)
2.2 FRSC FINANCIAL REPORTING PRONOUNCEMENTS
• FRP 1: Substantively enacted tax rates and tax laws under IFRS and IFRS for SMEs (FRG1 of
SAICA)
• FRP 2: Accounting for Black Economic Empowerment (BEE) Transactions under IFRS (FRG 2 of
SAICA)
• FRP 3: Accounting for Black Economic Empowerment transactions under IFRS for SMEs
• FRP 4: The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their
Interaction under IFRS in the South African Pension Fund Environment (FRG 3 of SAICA but
now withdrawn)
• FRP 5: Summary Financial Statements
3. THE JSE REQUIREMENTS
1. JSE requires full compliance with
IFRS (including headline EPS
disclosures)
2. JSE requires listed companies to
apply (and explain how they have
applied) the requirements of
King 4 (for more detail see
chapter 2)
Apply principles
King 4 sets out 17 principles which
are fundamental to good governance.
They are phrased as aspirations and
ideals that all organisations should
strive to meet to achieve good
governance outcomes. Application of
these principles is assumed as they
are basic and fundamental to good
governance.
Explain practices
Organisations should provide a narrative
account referring to practices that
demonstrate application of the principle. The
explanation should address which
recommended or other practices have been
implemented, and how these achieve or give
effect to the principle.
 Listed companies are required to produce an integrated
report

3. JSE An integrated report is defined as (King 4):

REQUIREMENTS • a concise communication

CONT. • about how an organisation’s strategy, governance,

performance and prospects,
• in the context of its external environment,
• leads to the creation of value
• in the short, medium and long term.
 Circulars issued by SAICA

4. OTHER
REQUIREMENTS CIPC requires companies to use XBRL to submit
annual financial statements to CIPC
IN SA
REPORTING
Comply with the Employment Equity Act by (inter alia)
publishing a summary of the company’s
Employment Equity Report in its financial statements