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G.A.A.P. versus I.F.R.S

By Johannes van Rensburg on Sun, 18 Mar 2012 at 15:03

Good Day

I refer to an article written by Clint Riddin during August 2009.

Do I read the article correct that the BC may by unanimous vote, decide that a Complex may remain with the GAAP method of finance reporting and not move over to the IFRS method of reporting?

Or, are we compelled to move to IFRS regardless, once you have more than the prescribed 10 Units in a Complex.

We have by unanimous vote at an AGM decided to stay with the GAAP method. We have changed the Conduct Rules and forwarded it to the Registrar for notice.

We do comply to the correct financial guidelines, IE: Owner names, Levy statements, (Paid up / Arrears) Ageing of Debtors and Creditors as part of Financial Statements (If Any) Asset depreciation is shown on the statements etc.


Best Regards

Hannes

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RE: G.A.A.P. versus I.F.R.S

Thomas Groenewald replied on Sun, 18 Mar 2012 at 19:17

I am curious to read replies. My assumption would be existing standard practices?

RE: G.A.A.P. versus I.F.R.S

Myburgh Brink replied on Sun, 18 Mar 2012 at 20:26

I attended a presentation by Clint Riddin in May last year and this also came up. From what I can recall the IFRS model for used for small/medium businesses could (should) be adapted for ST schemes. It would not be for the scheme to decide on what to use (GAAP or IFRS) as the auditor is bound by the standards his regulatory body sets. So it would have to be IFRS. Maybe once the Regulations/Rules for the new Act comes into force it would be an idea to approach the auditing regulating body to have look at this issue because if IFRS is applied to the letter it would cost a fortune for ST schemes to have an audit done. I think that is why the wording in the audit report has changed slightly (at least those I have seen) to accommodate the fact that the "full" IFRS was not applied.

Unfortunately when the STA and Rules get amended/reviewed/updated by the powers that be, there are some aspects they are not very familiar with and this appears to be one of them – that being the reason that in the last three lots of amendments PMR's 2 (c) and 37 (1) have slipped through the cracks....Show More

RE: G.A.A.P. versus I.F.R.S

Rob Ross replied on Mon, 19 Mar 2012 at 04:40

The differences between IFRS and South African Statements of Generally Accepted Accounting Practice are as close to one another as to be insignificant, and any differences would be unlikely to impact on the results of a typical complex' AFS. Those with complex derivatives, obligations and substantive recognition issues should comply with IFRS to ensure a valid and measurable comparison.
Capitalising of physical assets may be one of the distinct exceptions, although IFRS does allow one to set a capitalisation level. Major capital expenditure could be capitalised and amortised over the useful life. If these improvements include things like additional buildings that are capable of being rented and/or sold it would be prudent to capitalise them.
Capitalisation has no tax benefits. Expensing term assets gives an incorrect understanding of the financial standing of the complex. Any repairs resulting in the purchase of new assets, like gates or gate motors could be expensed under the capitalisation levels.

RE: RE: G.A.A.P. versus I.F.R.S

Johannes van Rensburg replied on Tue, 20 Mar 2012 at 10:20

Thank You All for the replies I recieved.

Best Regards...Show More

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