The South African Institute of Chartered Accountants Circular 7/2004

STATUS AND EFFECTIVE DATES

OF STATEMENTS OF GENERALLY
ACCEPTED ACCOUNTING
PRACTICE (GAAP) AND
INTERPRETATIONS OF
STATEMENTS OF GAAP
Introduction
Since 1993, South Africa has been harmonising its Statements of .01
Generally Accepted Accounting Practice (GAAP) with international
standards. The harmonisation was recently completed, and the
Accounting Practices Board (APB) has since agreed to issue
International Financial Reporting Standards (IFRS) as Statements of
GAAP without amendment.

This circular clarifies the status and effective dates of Statements of .02
GAAP and Interpretations of Statements of GAAP and addresses them
in the following five different categories (as outlined in paragraphs .03
to .08 below):
• Improved Statements
• Revised Statements
• Aligned Statements
• New Statements
• Replacement Statements

Improved Statements
Transforming Statements of GAAP to be the same as IFRS .03
commenced with Statements of GAAP issued as a result of the
International Accounting Standards Board’s (IASB’s) Improvements
Project. The objectives in the Improvements Project were to reduce or
eliminate alternatives, redundancies and conflicts within existing
standards, and to make other improvements to them. The
Improvements Project also addressed some convergence issues
(convergence to United States GAAP) and merged any related
interpretations into the standards whenever the revision of a standard

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presented a suitable opportunity. Thirteen existing Statements of GAAP

were improved in this batch, which are currently referred to as the
“Improved Statements”.

Revised Statements
.04 In addition to the IASB’s Improvements Project, certain standards
were revised by the IASB. These have also been revised in South
Africa and are referred to as “Revised Statements”. There are four
revised statements.

Aligned Statements
.05 Those remaining Statements of GAAP and Interpretations of
Statements of GAAP not “improved” or “revised” by the IASB were
aligned with the current text of IFRS and Interpretations of IFRS.
These are referred to as the “Aligned Statements” or “Aligned
Interpretations”. Fifteen aligned statements and twelve aligned
interpretations have been issued.

.06 The alignment process was outlined in Circular 5/2003 – Alignment of

the text of Statements of Generally Accepted Accounting Practice with
that of International Financial Reporting Standards.

New Statements
.07 New standards that have been developed in their entirety by the IASB,
rather than the predecessor body, the International Accounting
Standards Committee (IASC), which issued International Accounting
Standards (IAS). These new standards were not an improvement or
revision of existing international standards, and have an IFRS prefix.
These have been issued in South Africa and are referred to in this
circular as “New Statements”.

Replacement Statements
.08 As part of its continuing activities, the IASB is considering the entire
set of IFRS. As a result of these considerations, it has replaced certain
existing standards in whole or in part already and issued these
replacement standards with an IFRS prefix. These have been issued in
South Africa and are referred to as “Replacement Statements”.

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STATEMENTS OF GAAP AND
INTERPRETATIONS OF STATEMENTS OF GAAP

Comprehensive list
The Appendix contains a comprehensive list of Statements of GAAP .09
and Interpretations of Statements of GAAP, which illustrates the status
of statements and interpretations: (“improved”, “revised”, “aligned”
“new” and “replacement”), their issue date and their effective date.

Dual numbering system

As South African Statements of GAAP and Interpretations of .10
Statements of GAAP are now the exact replica of the relevant
IAS/IFRS or Interpretation of IAS/IFRS, every Statement of GAAP
has a dual number comprising both the IAS or IFRS number, followed
by the AC number in brackets, for example IAS 1(AC 101) or IFRS
1(AC 138).

Effective dates
Improved Statements
The effective dates of the improved statements are for financial periods .11
commencing on or after 1 January 2005 with earlier application
encouraged. The improved statements are only effective when
adopted, therefore the existing Statement of GAAP is still in issue and
available for reporting periods before that date. The previous versions
of the statements remain available for application for any reporting
period commencing before 1 January 2005.

For example, AC 103 remains in issue until 1 January 2005, if an entity .12
adopts IAS 8(AC 103) with an effective date of 1 January 2005. For
these statements, the South African effective date is the same as that
contained in the IAS. If an entity is preparing financial statements for a
period ending, say December 2004, the old version (AC 103) may still
be applied, no matter when this preparation is taking place.
Alternatively the entity may choose to early adopt the improved
statement IAS 8(AC 103).

Revised Statements
As for the improved statements, the existing Statements of GAAP are .13
still available for use until the revised statements are applied. For
example, AC 125 remains effective until the entity applies the revised

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version IAS 32(AC 125), which is compulsory for periods

commencing 1 January 2005, but which may be elected to be applied
earlier. For these revised statements, the South African effective date
is the same as that contained in the IAS.

Aligned Statements and Interpretations

.14 The effective dates of the aligned statements and aligned interpretations
are unchanged. The original South African effective date is noted in
each statement as a footnote to the effective date of the IAS or
Standing Interpretations Committee (SIC).

.15 The aim of the alignment process was merely to align the text of
Statements of GAAP and Interpretations of Statements of GAAP with
the equivalent IFRS or Interpretation of IFRS. There were no
differences in recognition and measurement, only limited disclosure
and minor editorial differences. Accordingly, these limited changes to
Statements of GAAP were to be applied immediately upon the issue of
the aligned statements and aligned interpretations. The details of the
changes made to align each statement and interpretation are contained
within ED167 – Alignment of Text of Statements of Generally
Accepted Accounting Practice with that of International Financial
Reporting Standards and ED 170 – Alignment of the Text of
Interpretations of Statements of Generally Accepted Accounting
Practice with that of Interpretations of International Financial
Reporting Standards respectively.

.16 It is clear that situations exist where Statements of GAAP and IAS
have different effective dates. Entities previously applying Statements
of GAAP and wishing to claim compliance with IFRS need to consider
the effective date to be used for such compliance and, depending on
the date, they should apply the requirements of either AC 408 – First-
time Application of Statements of Generally Accepted Accounting
Practice as the Primary Basis of Accounting or IFRS 1 – First-time
Adoption of International Financial Reporting Standards, whichever
is appropriate.

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STATEMENTS OF GAAP AND
INTERPRETATIONS OF STATEMENTS OF GAAP

New Statements
The new standards issued by the IASB have an IFRS prefix. These .17
standards are issued in South Africa as Statements of GAAP with the
dual numbering system as follows, IFRS 1(AC 138) and with the same
effective date as that of the IFRS. As there is no existing Statement of
GAAP on the matters addressed in these new statements (for example
IFRS 2(AC 139), each statement sets out its own specific effective
date, and the accounting treatment prescribed becomes effective when
each specific statement is first applied.

Replacement Statements
Certain standards issued by the IASB replace, in whole or in part, .18
existing standards and these replacement standards also have an IFRS
prefix. These standards are issued in South Africa as Statements of
GAAP with the dual numbering system as follows IFRS 3(AC 140)
with the same effective date as that of the IFRS.

As the IFRS replaces one or more existing Statements of GAAP on the .19
same topic, the existing statements will remain effective until such time
as the IFRS comes into effect. Each replacement statement sets out
its own specific effective date and the accounting treatment prescribed
becomes effective when each specific statement is first applied as a
replacement of an existing statement. For example AC 131 is replaced
by IFRS 3(AC 140), which sets out the effective date and transitional
provisions.

Existing Interpretations of Statements of GAAP

Interpretations of Statements of GAAP that have not been aligned, are .20
those that will be superseded as a result of the improved statements,
revised statements, new statements or replacement statements issued.
These interpretations will be superseded and therefore are not
applicable to entities at the same time as the respective improved,
revised, new, replacement statement comes into effect. Because the
respective improved, revised, new, replacement statement is only
effective when adopted, the existing interpretations remain in issue and
are still available for reporting periods before that date. They remain

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available for application for any reporting period before 1 January 2005
no matter when this preparation is taking place.

Early adoption of Statements

.21 When entities adopt a statement before its effective date, the entity is
required to refer to those interpretations and other statements existing
at the time of the early adoption. The entity should be consistent in
applying all statements and interpretations that were effective at the
date of approval of the financial statements. The improved statements
and certain revised, replacement, new statements are effective for
periods commencing 1 January 2005, with earlier application
encouraged and whilst piecemeal early adoption is not prohibited, it is
not encouraged.

Consequential amendments
.22 The improved, revised, new, replacement statements contain various
consequential amendments to other statements. These consequential
amendments to other statements should be effected when the
improved, revised, new, replacement statement is applied.

Johannesburg I Sehoole
June 2004 Executive President

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APPENDIX

IAS(AC) Title Date Effectiv Status

Issued/ e Date*
Revised
Accounting Framework
Framework for the Feb 04 N/A Aligned
Preparation and
Presentation of
Financial Statements
Statements of Generally Accepted Accounting Practice
AC 100 Preface to Statements Apr 83 N/A Exposed as
of Generally Accepted ED 174
Accounting Practice Revised
Preface still to
be issued.
AC 101 Presentation of Oct 98 Jul 99 Existing
Financial Statements
IAS 1(AC 101) Presentation of Mar 04 Jan 05 Improved
Financial Statements
IAS 12(AC 102) Income Taxes Feb 04 Jan 01 Aligned
AC 103 Net Profit or Loss for Mar 95 Mar 95 Existing
the Period,
Fundamental Errors
and Changes in
Accounting Policies
IAS 8(AC 103) Accounting Policies, Mar 04 Jan 05 Improved
Changes in Accounting
Estimates and Errors
AC 104 Earnings Per Share Oct 98 Jan 99 Existing
IAS 33(AC 104) Earnings Per Share Mar 04 Jan 05 Improved
AC 105 Leases Dec 99 Mar 00 Existing
IAS 17(AC 105) Leases Mar 04 Jan 05 Improved
AC 107 Events After the Jan 00 Jan 01 Existing
Balance Sheet Date
IAS 10(AC 107) Events After the Mar 04 Jan 05 Improved
Balance Sheet Date
AC 108 Inventories Aug 95 Oct 95 Existing
IAS 2(AC 108) Inventories Mar 04 Jan 05 Improved
IAS 11(AC 109) Construction Contracts Feb 04 Jan 95 Aligned
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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IAS(AC) Title Date Effectiv Status

Issued/ e Date*
Revised
AC 110 Accounting for Jun 99 Jan 00 Existing
Investments in
Associates
IAS 28(AC 110) Investments in Mar 04 Jan 05 Improved
Associates
IAS 18(AC 111) Revenue Feb 04 Jan 95 Aligned
AC 112 Accounting for the Apr 98 Jan 99 Existing
Effects of Changes in
Foreign Exchange
Rates
IAS 21(AC 112) The Effects of Mar 04 Jan 05 Improved
Changes in Foreign
Exchange Rates
IAS 23(AC 114) Borrowing Costs Feb 04 Mar 95 Aligned
IAS 14(AC 115) Segment Reporting Feb 04 Jul 95 Aligned
IAS 19(AC 116) Employee Benefits Feb 04 Jan 01 Aligned
AC 117 Discontinuing Jun 99 Jun 99 Replaced with
Operations IFRS 5
IAS 7(AC 118) Cash Flow Statements Feb 04 Jul 96 Aligned
AC 119 Financial Reporting of Jun 99 Mar 97 Existing
Interests in Joint
Ventures
IAS 31(AC 119) Interests in Joint Mar 04 Jan 05 Improved
Ventures
IAS 30(AC 120) Disclosure in the Feb 04 Jan 96 Aligned
Financial Statements
of Banks
AC 121 Disclosure in the Feb 94 Jan 94 To be
financial statements of withdrawn on
long term insurers 1 Jan 05.
Refer to
IFRS 4
AC 123 Property, Plant and Jun 99 Jan 00 Existing
Equipment
IAS 16(AC 123) Property, Plant and Mar 04 Jan 05 Improved
Equipment
IAS 29(AC 124) Financial Reporting in Feb 04 Mar 97 Aligned
Hyperinflationary
Economies
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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IAS(AC) Title Date Effective Status

Issued/ Date*
Revised
AC 125 Financial Instruments: Aug 97 Jan 98 Existing
Disclosure and
Presentation
IAS 32(AC 125) Financial Instruments: Jun 04 Jan 05 Revised
Disclosure and
Presentation
AC 126 Related Party Jun 00 Jul 98 Existing
Disclosures
IAS 24(AC 126) Related Party Mar 04 Jan 05 Improved
Disclosures
IAS 34(AC 127) Interim Financial Feb 04 Jul 99 Aligned
Reporting
AC 128 Impairment of Assets Jun 99 Jan 00 Existing
IAS 36(AC 128) Impairment of Assets Jun 04 31 Mar 04 Revised
AC 129 Intangible Assets Jun 99 Jan 00 Existing
IAS 38(AC 129) Intangible Assets Jun 04 31 Mar 04 Revised
IAS 37(AC 130) Provisions, Contingent Feb 04 Jan 00 Aligned
Liabilities and
Contingent Assets
AC 131 Business Combinations Jun 99 Jan 00 Replaced
with IFRS 3
(AC 140)
AC 132 Consolidated Financial Jun 99 Jan 00 Existing
Statements and
Accounting for
Investments in
Subsidiaries
IAS 27(AC 132) Consolidated and Mar 04 Jan 05 Improved
Separate Financial
Statements
AC 133 Financial Instruments: Sep 02 Jul 02 Existing
Recognition and
Measurement
IAS 39(AC 133) Financial Instruments: Jun 04 Jan 05 Revised
Recognition and
Measurement
*Unless indicated otherwise, effective date refers to annual periods commencing
on/after the respective date indicated.

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IAS(AC) Title Date Effective Status

Issued/ Date*
Revised
IAS 20(AC 134) Accounting for Feb 04 Jul 00 Aligned
Government Grants
and Disclosure of
Government
Assistance
AC 135 Investment Property Oct 00 Apr 01 Existing
IAS 40(AC 135) Investment Property Mar 04 Jan 05 Improved
IAS 26(AC 136) Accounting and Feb 04 Jun 01 Aligned
Reporting by
Retirement Benefit
Plans
IAS 41(AC 137) Agriculture Feb 04 Jan 03 Aligned
IFRS 1(AC 138) First-time Adoption of Aug 03 Jun 03 New
International Financial
Reporting Standards
IFRS 2 (AC 139) Share based Payment Jun 04 Jan 05 New
IFRS 3(AC 140) Business Combinations Jun 04 Business Replaced
com-
binations
after
31 Mar 04
IFRS 4 (AC 141) Insurance Contracts Jun 04 Jan 05 New
IFRS 5(AC 142) Non-current Assets Jun 04 Jan 05 New/
Held for Sale and Replaced
Discontinued
Operations
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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SIC(AC) Title Date Effective Status

Issued/ Date*
Revi se
d
Interpretations of Statements of Generally Accepted Accounting Practice
Preface to Interpretations Jun 04 N/A Aligned
of Statements of Generally
Accepted Accounting
Practice
AC 401 Consistency – different Jul 99 Jan 00 Existing,
cost formulas for superseded as a
inventories result of
Improved
statement
IAS 2(AC 108)
AC 402 Consistency – Jul 99 Jan 00 Existing,
capitalisation of borrowing superseded as a
costs result of
Improved
statement
IAS 23(AC114)
AC 403 Elimination of unrealised Jul 99 Jan 00 Existing,
profits and losses on superseded as a
transactions with result of
associates Improved
statement
IAS 28(AC 110)
AC 405 Classification of financial Jul 99 Jan 00 Existing,
instruments – contingent superseded as a
settlement provisions result of IAS
32/39(AC
125/133)
revisions
AC 406 Costs of modifying Jul 99 With Existing,
existing software immediate superseded as a
effect result of
Improved
statement
IAS 16(AC 123)
SIC 7(AC 407) Introduction of the Euro Jun 04 With Aligned
immediate
effect, issued
Jul 99
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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SIC(AC) Title Date Effective Status

Issued/ Date*
Revised
AC 408 First-time Dec 99 With Replaced by
application of immediate IFRS 1(AC
Statements of effect 138)
Generally Accepted
Accounting Practice
as the primary basis
of accounting
AC 409 Business Dec 99 Jan 00 Existing,
combinations – superseded as a
classification either result of
as acquisitions or IFRS 3(AC
unitings of interests 131)
SIC 10(AC 410) Government Jun 04 Jul 00 Aligned
assistance – no
specific relation to
operating activities
AC 411 Foreign exchange – Jul 99 With Existing,
capitalisation of losses immediate superseded as a
resulting from severe effect result of Improved
currency devaluations statement
IAS 21(AC 112)
SIC 12(AC 412) Consolidations – Jun 04 Jan 00 Aligned
special purpose entities
SIC 13(AC 413) Jointly controlled Jun 04 With Aligned
entities – non-monetary immediate
contributions by effect, issued
venturers Dec 99
AC 414 Property, plant and Dec 99 With Existing,
equipment – immediate superseded as a
compensation for the effect result of Improved
impairment or loss of statement
items IAS 16(AC 123)
SIC 15(AC 415) Operating leases – Jun 04 Lease terms Aligned
incentives commencing
on or after Dec
99
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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INTERPRETATIONS OF STATEMENTS OF GAAP

SIC(AC) Title Date Effective Statu s

Issued/ Date*
Revised
AC 416 Share capital – Dec 99 With Existing,
reacquired own immediate superseded as a
effect result of IAS
equity instruments
32/39(AC
(Treasury shares) 125/133)
revisions
AC 417 Equity – cost of an Aug 00 With Existing,
equity transaction immediate superseded as a
effect result of IAS
32/39(AC
125/133)
revisions
AC 418 Consistency – alternative Aug 00 Jul 00 Existing,
methods superseded as a
result of
Improved
statement
IAS 8(AC 103)
AC 419 Reporting currency – Ápr 01 Jan 01 Existing,
measurement and superseded as a
presentation of financial result of
statements under the Improved
statement on the effects of statement
changes in foreign IAS 21(AC 112)
exchange rates and the
statement on financial
reporting in
hyperinflationary
economies
AC 420 Equity accounting Oct 00 With Existing,
method – recognition of immediate superseded as a
losses effect result of
Improved
statement
IAS 28(AC 110)
SIC 21(AC 421) Income taxes – recovery Jun 04 With Aligned
of revalued non- immediate
depreciable assets effect, issued
Oct 00
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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SIC(AC) Title Date Effective Status

Issued/ Date*
Revised
AC 422 Business combinations Oct 00 With Existing,
– subsequent adjustment immediate superseded as a
of fair value and effect result of
goodwill initially IFRS 3(AC 131)
reported
AC 423 Property, plant and Oct 00 With Existing
equipment – major immediate superseded as a
inspection or overhaul effect result of
costs Improved
Statement
IAS 16(AC 123)
AC 424 Earnings per share – Apr 01 With Existing
financial instruments and immediate superseded as a
other contracts that may effect result of
be settled in shares Improved
Statement
IAS 33(AC 104)
SIC 25(AC 425) Income taxes – changes Jun 04 With Aligned
in the tax status of an immediate
enterprise or its effect,
shareholders issued
Oct 00
SIC 27(AC 427) Evaluating the substance Jun 04 With Aligned
of transactions involving immediate
the legal form of a lease effect
issued
Apr 02
AC 428 Business combinations Apr 02 With Existing,
– “date of exchange” and immediate superseded as a
fair value of equity effect result of
instruments IFRS 3(AC 131)
SIC 29(AC 429) Disclosure – service Jun 04 With Aligned
concession arrangements Immediate
Effect,
Issued
Apr 02
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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INTERPRETATIONS OF STATEMENTS OF GAAP

SIC(AC) Title Date Effective Status

Issued/ Date*
Revised
AC 430 Reporting currency – Apr 02 Jan 02 Existing,
translation from superseded as a
measurement currency to result of
presentation currency Improved
statement
IAS 21(AC 112)
SIC 31(AC 431) Revenue – barter Jun 04 With Aligned
transactions involving immediate
advertising services effect,
issued
Apr 02
SIC 32(AC 432) Intangible assets – web Jun 04 With Aligned
site costs immediate
effect,
issued
Sep 02
AC 433 Consolidation and Apr 02 Jan 02 Existing,
equity method – superseded as a
potential voting rights result of
and allocation of Improved
ownership interests statement
IAS 28(AC 110)
*Unless indicated otherwise, effective date refers to periods commencing on/after the
respective date indicated.

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