Generally Recognized Accounting Practice, also known as GRAP, is a set of fundamental concepts that serve as accounting process guidelines for South African-based companies. These guidelines laid down by the Accounting Standards Board (ASB) ensure that the public sector agencies record their financial activities accurately and consistently.
GRAP and PFMA
The Public Finance Management Act or PFMA is the act on which the accounting standards board issues the accounting standards (GRAP) in South Africa. GRAP ensures that accountants all across South Africa follow a standard process to record financial transactions. This ensures transparency and consistency in the handling of funds by public entities. Therefore, it is important that all state-owned entities in South Africa strictly comply with the GRAP.
How Does GRAP Affect State-owned Companies?
To understand how it affects state-owned companies, first, you need to understand what a state-owned company is.
What is a State Owned Company?
An enterprise which is:-
● Listed as a public entity under the Public Finance Management Act (PFMA), 1999; or
● Owned by a municipality under the Local Government Municipal Systems Act, 2000, and is otherwise similar to an enterprise as mentioned above.
Up until now, state-owned companies were not able to submit their annual financial statements in the iXBRL format as the taxonomy was based on the International Financial Reporting Standards (IFRS). However, as per the new amendment from the CIPC, the state-owned companies that previously couldn’t submit their GRAP standard-based AFSs in the iXBRL format can now do so.
What’s more is that w.e.f October 1, 2020, until September 30, 2021, state-owned companies whose finances are based on GRAP may voluntarily submit their AFSs in the iXBRL format. So, for every state-owned company out there in South Africa – make this transition as soon as possible as from October 1, 2021, the submission of GRAP-based financial statements will be mandated.
Compliance is Key
Transitioning to iXBRL during the voluntary stage is recommended as it allows figuring out the nitty-gritty of the filing compliances. DataTracks, a global leader in XBRL solutions, can help smoothen this transition. Boasting 15+years of extensive filing experience and experts who are well-versed in IFRS as well as GRAP, DataTracks has become a pioneer in this domain. DataTracks not only help you comply with the new filing requirement but also with the error-free filing of your AFS.
To know more about DataTracks and their services, please speak to an expert @ +27-10 446-9061 or write to firstname.lastname@example.org.