Acts Online
GT Shield

Public Finance Management Act, 1999 (Act No. 1 of 1999)

Notices

Standard of Generally Recognised Accounting Practice (GRAP)

GRAP 2 : Cash Flow Statements

 

Introduction

 

Standards of Generally Recognised Accounting Practice

 

The Accounting Standards Board (Board) is required in terms of the Public Finance Management Act, Act No. 1 of 1999, as amended (PFMA), to determine generally recognised accounting practice referred to as Standards of Generally Recognised Accounting Practice (GRAP).

 

The Board must determine GRAP for:

(a) departments (national and provincial);
(b) public entities;
(c) constitutional institutions:
(d) municipalities and boards, commissions, companies, corporations, funds or other entities under the ownership control of a municipality; and
(e) Parliament and the provincial legislatures.

 

The above are collectively referred to as "entities" in Standards of GRAP.

 

The Board has approved the application of Statements of Generally Accepted Accounting Practice (GAAP), as codified by the Accounting Practices Board and issued by the South African Institute of Chartered Accountants, to be GRAP for:

(a) government business enterprises (as defined in the PFMA);
(b) trading entities (as defined in the PFMA);
(c) any other entity, other than a municipality, whose ordinary shares, potential ordinary shares or debt are publicly tradable on the capital markets; and
(d) entities under the ownership control of any of these entities.

 

The Board believes that Statements of GAAP are relevant and applicable to financial statements prepared by all such entities, including those under their ownership control.

 

Financial statements should be described as complying with Standards of GRAP only if they comply with all the requirements of each applicable Standard of GRAP and any related interpretation that may be issued in the future.

 

Any limitation of the applicability of specific Standards is made clear in those Standards.

 

The Standard of GRAP on Cash Flow Statements is set out in paragraphs .01 - .51.

 

All paragraphs in this Standard have equal authority. The authority of appendices is dealt with in the preamble to each appendix. This Standard should be read in the context of its objective, the Preface to Standards of GRAP and the Framework for the Preparation and Presentation of Financial Statements.

 

Reference may be made here to a Standard of GRAP that has not been issued at the time of issue of this Standard. This is done to avoid having to change the Standards already issued when a later Standard is subsequently issued. Paragraph .12 of the Standard of GRAP on Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.

 

0bjective

 

.01 The cash flow statement identifies the sources of cash inflows, the items on which cash was expended during the reporting period, and the cash balance as at the reporting date. Information about the cash flows of an entity is useful in providing users of financial statements with information for both accountability and decision making purposes. Cash flow information allows users to ascertain how an entity raised the cash it required to fund its activities and the manner in which that cash was used. In making and evaluating decisions about the allocation of resources, such as the sustainability of the entity’s activities, users require an understanding of the timing and certainty of cash flows.

 

The objective of this Standard is to require the provision of information about the historical changes in cash and cash equivalents of an entity by means of a cash flow statement which classifies cash flows during the period from operating, investing and financing activities.

 

Scope

 

.02 An entity that prepares and presents financial statements under the accrual basis of accounting shall prepare a cash flow statement in accordance with the requirements of this Standard and shall present it as an integral part of its financial statements for each period for which financial statements are presented.

 

.03 Information about cash flows may be useful to users of an entity’s financial statements in assessing the entity’s cash flows, assessing the entity’s compliance with legislation and regulations (including authorised budgets where appropriate) and for making decisions about whether to provide resources to, or enter into transactions with an entity. They are generally interested in how the entity generates and uses cash and cash equivalents. This is the case regardless of the nature of the entity’s activities and irrespective of whether cash can be viewed as the product of the entity, as may be the case with a public financial institution. Entities need cash for essentially the same reasons, however different their principal revenue producing activities might be. They need cash to pay for the goods and services they consume, to meet ongoing debt servicing costs, and, in some cases, to reduce levels of debt. Accordingly, this Standard of GRAP requires all entities to present a cash flow statement.

 

Benefits of cash flow information

 

.04 Information about the cash flows of an entity is useful in assisting users to predict the future cash requirements of the entity, its ability to generate cash flows in the future and fund changes in the scope and nature of its activities. A cash flow statement also provides a means by which an entity can discharge its accountability for cash inflows and cash outflows during the reporting period.

 

.05 A cash flow statement, when used in conjunction with other financial statements, provides information that enables users to evaluate the changes in net assets of an entity, its financial structure (including its liquidity and solvency) and its ability to affect the amounts and timing of cash flows in order to adapt to changing circumstances and opportunities. It also enhances the comparability of the reporting of operating performance by different entities, because it eliminates the effects of using different accounting treatments for the same transactions, other events and conditions.

 

.06 Historical cash flow information is often used as an indicator of the amount, timing and certainty of future cash flows. It is also useful in checking the accuracy of past assessments of future cash flows.

 

Definitions

 

.07 The following terms are used in this Standard with the meanings specified:

 

Accrual basis means a basis of accounting under which transactions and other events are recognised when they occur (and not only when cash or its equivalent is received or paid). Therefore, the transactions and events are recorded in the accounting records and recognised in the financial statements of the periods to which they relate. The elements recognised under the accrual basis are assets, liabilities, net assets, revenue and expenses.

 

Assets are resources controlled by an entity as a result of past events and from which future economic benefits or service potential are expected to flow to the entity.

 

Associate is an entity, including an unincorporated entity such as a partnership, over which the investor has significant influence and that is neither a controlled entity nor a joint venture.

 

Cash comprises cash on hand and demand deposits.

 

Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

 

Cash flows are inflows and outflows of cash and cash equivalents.

 

Consolidated financial statements are the financial statements of an economic entity presented as those of a single entity.

 

Contributions from owners means future economic benefits or service potential that have been contributed to the entity by patties external to the entity, which establish their financial interest in the net assets of the entity, provided that the contributions:

(a) Do not result in liabilities of the entity, and
(b) meet both of the following tests;
(i) They convey entitlement both to distributions of future economic benefits or service potential by the entity during its life, such distributions being at the discretion of the owners or their representatives, and to distributions of any excess of assets over liabilities in the event of the entity being wound up.
(ii) They can be sold, exchanged, transferred or redeemed.

 

Control is the power to govern the financial and operating policies of another entity so as to benefit from its activities.

 

Controlled entity is an entity, including an unincorporated entity such as a partnership that is under the control of another entity (known as the controlling entity).

 

Controlling entity is an entity that has one or more controlled entities.

 

Cost method is a method of accounting whereby the investment is recorded at cost. The statement of financial performance reflects revenue from the investment only to the extent that the investor receives distributions from accumulated net surpluses of the investee arising subsequent to the date of acquisition.

 

Distributions to owners means future economic benefits or service potential distributed by the entity to all or some of its owners, either as a return on investment or as a return of investment.

 

Economic entity means a group of entities comprising a controlling entity and one or more controlled entities.

 

Equity method is a method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the investor’s share of net assets of the investee.

The surplus or deficit of the investor includes the investor’s share of the surplus or deficit of the investee.

 

Exchange difference is the difference resulting from translating a given number of units of one currency into another currency at different exchange rates.

 

Exchange rate is the ratio of exchange for two currencies.

 

Expenses are decreases in economic benefits or service potential during the reporting period in the form of outflows or consumption of assets or incurrences of liabilities that result in decreases in net assets, other than those relating to distributions to owners.

 

Financing activities are activities that result in changes in the size and composition of the contributed capital and borrowings of the entity.

 

Foreign currency is a currency other than the functional currency of the entity.

 

Functional currency is the currency of the primary economic environment in which the entity operates.

 

Government business enterprise means an entity that, in accordance with the Public Finance Management Act, Act No. 1 of 1999, as amended:

(a) is a juristic person under the ownership control of the national/provincial executive;
(b) has been assigned the financial and operational authority to carry on a business activity;
(c) as its principal business, provides goods or services in accordance with ordinary business principles; and
(d) is financed fully or substantially from sources other than -
(i) the National or Provincial Revenue Fund; or
(ii) by way of a tax, levy or other statutory money.

 

Impracticable - Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. For a particular prior period, it is impracticable to apply a change in an accounting policy retrospectively or to make a retrospective restatement to correct an error if:

(a) the effects of the retrospective application or retrospective restatement are not determinable;
(b) the retrospective application or retrospective restatement requires assumptions about what management’s intent would have been in that period; or
(c) the retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that:
(i) provides evidence of circumstances that existed on the date(s) as at which those amounts are to be recognised, measured or disclosed; and
(ii) would have been available when the financial statements for that prior period were authorised for issue from other information.

 

lnvesting activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

 

Investor in a joint venture is a party to a joint venture and does not have joint control over that joint venture.

 

Joint venture is a binding arrangement whereby two or more parties are committed to undertake an activity which is subject to joint control.

 

Liabilities are present obligations of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits or service potential.

 

Management comprises those persons responsible for the governance of the entity in accordance with legislation, including the accounting officers, however described in legislation.

 

Material omissions or misstatements of items are material if they could, individually or collectively, influence the decisions or assessments of users made on the basis of the financial statements. Materiality depends on the nature or size of the omission or misstatement judged in the surrounding circumstances. The size or nature of the information item, or a combination of both, could be the determining factor.

 

Minority interest is that portion of the surplus or deficit and of net assets of a controlled entity attributable to interests that are not owned, directly or indirectly through controlled entities, by the controlling entity.

 

Net assets are the residual interest in the assets of the entity after deducting all its liabilities.

 

Notes contain information in addition to that presented in the statement of financial position, statement of financial performance, statement of changes in net assets and cash flow statement. Notes provide narrative descriptions or disaggregations of items disclosed in those statements and information about items that do not qualify for recognition in those statements.

 

Operating activities are the activities of the entity that are not investing or financing activities.

 

Presentation currency is the currency in which the financial statements are presented.

 

Proportionate consolidation is a method of accounting and reporting whereby a venturer’s share of each of the assets, liabilities, revenue and expenses of a jointly controlled entity is combined on a line-by-line basis with similar items in the venturer‘s financial statements or reported as separate line items in the venturer’s financial statements.

 

Provisions are liabilities of uncertain timing and amount.

 

Reporting date means the date of the last day of the reporting period to which the financial statements relate.

 

Revaluations are restatements of assets and liabilities.

 

Revenue is the gross inflow of economic benefits or service potential during the reporting period when those inflows result in an increase in net assets, other than increases relating to contributions from owners.

 

Presentation of a cash flow statement

 

.08 The cash flow statement shall report cash flows during the period classified by operating, investing and financing activities.

 

.09 An entity presents its cash flows from operating, investing and financing activities in a manner which is most appropriate to its activities. Classification by activity provides information that allows users to assess the impact of those activities on the financial position of the entity and the amount of its cash and cash equivalents. This information may also be used to evaluate the relationships among those activities.

 

.10 A single transaction may include cash flows that are classified differently. For example, when the cash repayment of a loan includes both interest and capital, the interest element may be classified as an operating activity and the capital element is classified as a financing activity.

 

Operating activities

 

.11 The amount of net cash flows arising from operating activities is a key indicator of the extent to which the operations of the entity are funded:
(a) by way of taxes (directly and indirectly); or
(b) from the recipients of goods and services provided by the entity.

 

The amount of the net cash flows also assists in showing the ability of the entity to maintain its operating capability, repay obligations, pay a dividend to its owner and make new investments without recourse to external sources of financing. The consolidated whole-of-government operating cash flows provide an indication of the extent to which a government has financed its current activities through taxation and charges. Information about the specific components of historical operating cash flows is useful, in conjunction with other information, in forecasting future operating cash flows.

 

.12 Cash flows from operating activities are primarily derived from the principal cash-generating activities of the entity. Examples of cash flows from operating activities are:
(a) cash receipts from taxes, levies and fines;
(b) cash receipts from charges for goods and services provided by the entity;
(c) cash receipts from grants or transfers and other appropriations or other budget authority made by national government or other entities;
(d) cash receipts from royalties, fees, commissions and other revenue;
(e) cash payments to other entities to finance their operations (not including loans);
(f) cash payments to suppliers for goods and services;
(g) cash payments to and on behalf of employees;
(h) cash receipts and cash payments of an insurance entity for premiums and claims, annuities and other policy benefits;
(i) cash payments of local property taxes or income taxes (where appropriate) in relation to operating activities;
(j) cash receipts and payments from contracts held for dealing or trading purposes;
(k) cash receipts or payments from discontinuing operations; and
(l) cash receipts or payments in relation to litigation settlements.

 

Some transactions, such as the sale of an item of plant, may give rise to a gain or loss which is included in the determination of net surplus or deficit. However, the cash flows relating to such transactions are cash flows from investing activities.

 

.13 An entity may hold securities and loans for dealing or trading purposes, in which case they are similar to inventory acquired specifically for resale. Therefore, cash flows arising from the purchase and sale of dealing or trading securities are classified as operating activities. Similarly, cash advances and loans made by public financial institutions are usually classified as operating activities since they relate to the main cash-generating activity of that entity.

 

Investing activities

 

.14 The separate disclosure of cash flows arising from investing activities is important because the cash flows represent the extent to which cash outflows have been made for resources which are intended to contribute to the entity's future service delivery. Examples of cash flows arising from investing activities are:
(a) cash payments to acquire property, plant and equipment, intangibles and other long-term assets. These payments include those relating to capitalised development costs and self-constructed property, plant and equipment;
(b) cash receipts from sales of property, plant and equipment, intangibles and other long-term assets;
(c) cash payments to acquire equity or debt instruments of other entities and interests in joint ventures (other than payments for those instruments considered to be cash equivalents or those held for dealing or trading purposes);
(d) cash receipts from sales of equity or debt instruments of other entities and interests in joint ventures (other than receipts for those instruments considered to be cash equivalents and those held for dealing or trading purposes);
(e) cash advances and loans made to other parties (other than advances and loans made by a public financial institution);
(f) cash receipts from the repayment of advances and loans made to other parties (other than advances and loans of a public financial institution);
(g) cash payments for futures contracts, forward contracts, option contracts and swap contracts, except when the contracts are held for dealing or trading purposes, or the payments are classified as financing activities; and
(h) Cash receipts from futures contracts, forward contracts, option contracts and swap contracts, except when the contracts are held for dealing or trading purposes, or the receipts are classified as financing activities.

 

When a contract is accounted for as a hedge of an identifiable position, the cash flows of the contract are classified in the same manner as the cash flows of the position being hedged.

 

Financing activities

 

.15 The separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of capital to the entity. Examples of cash flows arising from financing activities are:
(a) cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other short- or long-term borrowings;
(b) cash repayments of amounts borrowed; and
(c) cash payments by a lessee for the reduction of the outstanding liability relating to a finance lease.

 

Reporting cash flows from operating activities

 

.16 An entity shall report cash flows from operating activities using the direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed.

 

.17 The direct method provides information which may be useful in estimating future cash flows. Under the direct method, information about major classes of gross cash receipts and gross cash payments may be obtained either:
(a) from the accounting records of the entity; or
(b) by adjusting operating revenues, operating expenses (interest and similar revenue, and interest expense and similar charges for a public financial institution) and other items in the statement of financial performance for:
(i) changes during the period in inventories and operating receivables and payables;
(ii) other non-cash items; and
(iii) other items for which the cash effects are investing or financing cash flows.

 

.18 Entities should provide a reconciliation of the surplus/deficit with the net cash flow from operating activities. This reconciliation may be provided as part of the cash flow statement or in the notes to the financial statements.

 

Reporting cash flows from investing and financing activities

 

.19 An entity shall report separately major classes of gross cash receipts and gross cash payments arising from investing and financing activities, except to the extent that cash flows described in paragraphs .20 and .23 are reported on a net basis.

 

Reporting cash flows on a net basis

 

.20 Cash flows arising from the following operating, investing or financing activities may be reported on a net basis:
(a) cash receipts collected and payments made on behalf of customers, taxpayers or beneficiaries when the cash flows reflect the activities of the other party rather than those of the entity; and
(b) cash receipts and payments for items in which the turnover is quick, the amounts are large, and the maturities are short.

 

.21 Paragraph .20(a) refers only to transactions where the resulting cash balances are controlled by the reporting entity. Examples of such cash receipts and payments include:
9a) the collection of taxes by one level of government for another level of government, not including taxes collected by a government for its own use as part of a tax sharing arrangement;
(b) the acceptance and repayment of demand deposits of a public financial institution;
(c) funds held for customers by an investment or trust entity; and
(d) rents collected on behalf of, and paid over to, the owners of properties.

 

.22 Examples of cash receipts and payments referred to in paragraph .20(b) are advances made for, and the repayment of:
(a) the purchase and sale of investments; and
(b) other short-term borrowings, for example, those which have a maturity period of three months or less.

 

.23 Cash flows arising from each of the following activities of a public financial institution may be reported on a net basis:
(a) cash receipts and payments for the acceptance and repayment of deposits with a fixed maturity date;
(b) the placement of deposits with and withdrawal of deposits from other financial institutions; and
(c) cash advances and loans made to customers and the repayment of those advances and loans.

 

Foreign currency cash flows

 

.24 Cash flows arising from transactions in a foreign currency shall be recorded in an entity’s functional currency by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the cash flow.

 

.25 The cash flows of a foreign controlled entity shall be translated at the exchange rates between the functional currency and the foreign currency at the dates of the cash flows.

 

.26 Cash flows denominated in a foreign currency are reported in a manner consistent with the Standard of GRAP on The Effects of Changes in Foreign Exchange Rates. This permits the use of an exchange rate that approximates the actual rate. For example, a weighted average exchange rate for a period may be used for recording foreign currency transactions or the translation of the cash flows of a foreign controlled entity. The Standard of GRAP on The Effects of Changes in Foreign Exchange Rates does not permit the use of the exchange rate at reporting date when translating the cash flows of a foreign controlled entity.

 

.27 Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows. However, the effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the cash flow statement in order to reconcile cash and cash equivalents at the beginning and the end of the period. This amount is presented separately from cash flows from operating, investing and financing activities and includes the differences, if any, had those cash flows been reported at end of period exchange rates.

 

Interest and dividends

 

.28 Cash flows from interest and dividends received and paid shall each be disclosed separately. Each shall be classified in a consistent manner from period to period as either operating, investing or financing activities.

 

.29 The total amount of interest paid during a period is disclosed in the cash flow statement whether it has been recognised as an expense in the statement of financial performance or capitalised in accordance with the allowed alternative treatment in the Standard of GRAP on Borrowing Costs.

 

.30 Interest paid and interest and dividends received are usually classified as operating cash flows for a public financial institution. However, there is no consensus on the classification of these cash flows for other entities. Interest paid and interest and dividends received may be classified as operating cash flows because they enter into the determination of net surplus or deficit.

 

Alternatively, interest paid and interest and dividends received may be classified as financing cash flows and investing cash flows respectively, because they are costs of obtaining financial resources or returns on investments.

 

.31 paid may be classified as a financing cash flow because they are a cost of obtaining financial resources. Alternatively, dividends paid may be classified as a component of cash flows from operating activities in order to assist users to determine the ability of an entity to make these payments out of operating cash flows.

 

Taxes on Surplus

 

.32 Cash flows arising from taxes on surplus shall be separately disclosed and shall be classified as cash flows from operating activities unless they can be specifically identified with financing and investing activities.

 

.33 Entities are generally exempt from taxes on surpluses.

 

.34 Taxes on surplus arise from transactions that give rise to cash flows that are classified as operating, investing or financing activities in a cash flow statement. While tax expense may be readily identifiable with investing or financing activities, the related tax cash flows are often impracticable to identify and may arise in a different period from the cash flows of the underlying transaction. Therefore, taxes paid are usually classified as cash flows from operating activities. However, when it is practicable to identify the tax cash flow with an individual transaction that gives rise to cash flows that are classified as investing or financing activities, the tax cash flow is classified as an investing or financing activity as appropriate. When tax cash flows are allocated over more than one class of activity, the total amount of taxes paid is disclosed.

 

Investments in controlled entities, associates and joint ventures

 

.35 When accounting for an investment in an associate or a controlled entity accounted for by use of the equity or cost method, an investor restricts its reporting in the cash flow statement to the cash flows between itself and the investee, for example, to dividends and advances.

 

.36 An entity that reports its interest in a jointly controlled entity using , proportionate consolidation includes in its consolidated cash flow statement its proportionate share of the jointly controlled entity’s cash flows. An entity which reports such an interest using the equity method includes in its cashflow statement the cash flows in respect of its investments in the jointly controlled entity, and distributions and other payments or receipts between it and the jointly controlled entity.

 

Acquisitions and disposals of controlled entities and other operating units

 

.37 The aggregate cash flows arising from acquisitions and from disposals of controlled entities or other operating units shall be presented separately and classified as investing activities.

 

.38 An entity shall disclose, in aggregate, in respect of both acquisitions and disposals of controlled entities or other operating units during the period, each of the following:
(a) the total purchase or disposal consideration;
(b) the portion of the purchase or disposal consideration discharged by means of cash and cash equivalents;
(c) the amount of cash and cash equivalents in the controlled entity or operating unit acquired or disposed of; and
(d) the amount of the assets and liabilities other than cash or cash equivalents recognised by the controlled entity or operating unit acquired or disposed of, summarised by each major category.

 

.39 The separate presentation of the cash flow effects of acquisitions and disposals of controlled entities and other operating units as single line items, together with the separate disclosure of the amounts of assets and liabilities acquired or disposed of, helps to distinguish those cash flows from the cash flows arising from the other operating, investing and financing activities. The cash flow effects of disposals are not deducted from those acquisitions.

 

.40 The aggregate amount of the cash paid or received as purchase, or sale consideration is reported in the cash flow statement net of cash and cash equivalents acquired or disposed of.

 

.41 Assets and liabilities other than cash or cash equivalents of a controlled entity or operating unit acquired or disposed of are only required to be disclosed where the controlled entity or unit had previously recognised those assets or liabilities. For example, where an entity which prepares reports under the cash basis is acquired by another entity, the acquiring entity would not be required to disclose the assets and liabilities (other than cash and cash equivalents) of the entity acquired, as that entity would not have recognized non-cash assets or liabilities.

 

Non-cash transactions

 

.42 Investing and financing transactions that do not require the use of cash or cash equivalents shall be excluded from a cash flow statement. Such transactions shall be disclosed elsewhere in the financial statements in a way that provides all the relevant information about these investing and financing activities.

 

.43 Many investing and financing activities do not have a direct impact on current cash flows although they do affect the capital and asset structure of an entity. The exclusion of non-cash transactions from the cash flow statement is consistent with the objective of a cash flow statement, as these items do not involve cash flows in the current period. Examples of non-cash transactions are:
(a) the acquisition of assets through the exchange of assets, the assumption of directly related liabilities, or by means of a finance lease; and
(b) the conversion of debt to equity.

 

Components of cash and cash equivalents

 

.44 An entity shall disclose the components of cash and cash equivalents and shall present a reconciliation of the amounts in its cash flow statement with the equivalent items reported in the statement of financial position.

 

.45 In view of the variety of cash management practices and banking arrangements and in order to comply with the GRAP on Presentation of Financial Statements, an entity discloses the policy which It adopts in determining the composition of cash and cash equivalents.

 

.46 The effect of any change in the policy for determining components of cash and cash equivalents, for example, a change in the classification of financial instruments previously considered to be part of an entity’s investment portfolio, is reported in accordance with the Standard of GRAP on Accounting Policies, Changes in Accounting Estimates and Errors.

 

Other disclosures

 

.47 An entity shall disclose, together with a commentary by management in the notes to the financial statements, the amount of cash and cash equivalent balances held by the entity that are not available for use by the economic entity.

 

.48 There are various circumstances in which cash and cash equivalent balances held by an entity are not available for use by the economic entity. Examples include cash and cash equivalent balances held by a controlled entity that operates in a country where exchange controls or other legal restrictions apply when the balances are not available for general use by the controlling entity or other controlled entities.

 

.49 Additional information may be relevant to users in understanding the financial position and liquidity of an entity. Disclosure of this information, together with a description in the notes to the financial statements, is required and shall include:
(a) the amount of undrawn borrowing facilities that may be available for future operating activities and to settle capital commitments, indicating any restrictions on the use of these facilities;
(b) the aggregate amounts of the cash flows from each of operating, investing and financing activities related to interests in joint ventures reported using proportionate consolidation; and
(c) the amount and nature of restricted cash balances.

 

.50 Where appropriations or budget authorisations are prepared on a cash basis, the cash flow statement may assist users in understanding the relationship between the entity’s activities or programmes and the government‘s budgetary information. Refer to the Standard of GRAP on Presentation of Financial Statements for a brief discussion of the comparison of actual and budgeted figures.

 

Effective date

 

.51 This Standard of Generally Recognised Accounting Practice becomes effective for annual financial statements covering periods beginning on or after a date to be determined by the Minister of Finance in a regulation to be published in accordance with section 91(1)(b)  of the Public Finance Management Act, Act No. 1 of 1999, as amended.

 


500 - Internal Server Error
500 - Internal Server Error

We're sorry, but something went wrong displaying that page. While we work on fixing this, you can return to the home page.

Alternatively, email [email protected] for assistance.