Financial Accounting

This Unit has covered the authoritative pronouncements, regulations or legislation which
govern the reporting of financial information in South Africa. Students need to understand
the South African reporting requirements and list the existing regulatory requirements which
form the three basic sources of reporting authority as they are relevant to all corporate
entities in South Africa.

Key points to remember

South African reporting requirements

▪ The three basic sources of authority for financial reporting are statute,
the JSE and IFRS (and IFRS for SMEs when applicable)
▪ The JSE requires companies to comply with King 4
▪ Listed companies must use IFRS.
▪ Unlisted companies must use IFRS or IFRS for SMEs provided they meet
the scoping requirements for IFRS for SMEs.
▪ Companies which have a PI score of < 100 have a choice of financial
reporting frameworks depending on whether their financial statements
are independently compiled or internally compiled.
JSE requirements
▪ The JSE requires full compliance with IFRS.
▪ The JSE requires listed companies to disclose HEPS.
▪ FRIP pro-actively monitors listed companies’ annual reports.
▪ The JSE requires companies to comply with King 4.
Other requirements in SA reporting
▪ SAICA issues circulars of interest to accountants (such as Headline
Earnings per Share).
▪ CIPC has announced a programme to require companies to submit their
financial reports using XBRL.
▪ Public companies must publish a summary of their Employment Equity
Plan in their annual financial statements.
The International Financial Reporting Standards (IFRS)
▪ The IASB has issued The Conceptual Framework for Financial
Reporting, IFRS, IFRS for SMEs and A Guide for Micro-Sized Entities
Applying the IFRS for SMEs (2009).

ACCESS FOR SUCCESS IN ACCOUNTING

 Financial Accounting

Key points to remember

▪ IFRS for SMEs is applicable to entities that do not have public

accountability, and publish general purpose financial statements for
external users.
▪ IFRS for SMEs allows an ‘undue cost or effort’ exemption for some of its
requirements; entities making use of this exemption must disclose that
fact and the reasons why applying the requirement would involve undue
cost or effort.
Source: A Guide to International Financial Reporting, Stainbank, Razak and Jankeeparsad.

ACCESS FOR SUCCESS IN ACCOUNTING