FINANCIAL REPORTING STANDARDS COUNCIL (FRSC)
NEWSLETTER – DECEMBER 2016
FINANCIAL REPORTING STANDARDS COUNCIL MEETING HELD ON 15
NOVEMBER 2016
Dear Stakeholder
The Financial Reporting Standards Council (FRSC) held its last meeting for the year on 15
November 2016. At this meeting, the FRSC considered the following matters that are
highlighted in this newsletter:

Amendments to the FRSC Rules of Procedure.

Review of a draft Discussion Paper on the Reduced Disclosure Framework.

Finalising Financial Reporting Pronouncements and Guidelines that were issued for
comment by the FRSC.

Draft Paper outlining issues on Ethical Taxes.

Comment letters issued to the IASB.

Update on other events.
RECAP OF THE ROLE OF THE FRSC
The FRSC was formed in October 2011 and is the legally constituted financial reporting
standard-setter for companies in South Africa. The FRSC was established by the Minister of
Trade and Industry in terms of section 201 of the Companies Act, Act no 71 of 2008, and
has the following responsibilities in terms of section 204 of the Companies Act:
•
to receive and consider any relevant information relating to the reliability of, and
compliance with financial reporting standards and to adapt international reporting
standards for local circumstances;
•
to advise the Minister of Trade and Industry on financial reporting standards matters; and
•
to consult with the Minister of Trade and Industry on regulations establishing financial
reporting standards.
THE CURRENT MEMBERS OF THE FRSC
Suresh Kana
Chairperson
Christine Ramon
Deputy Chairperson
Johan Brink
Member
Kim Bromfield
Member
Garth Coppin
Member
Khaya Dludla
Member
Dawn Earp
Member
Naidene Ford-Hoon
Member
Bruce Mackenzie
Member
Dumisani Manana
Member
Precious Mbingo
Member
Matshepo More
Member
Rory Voller
Member
Tania Wimberley
Member
There are currently three vacancies on the FRSC.
TECHNICAL MATTERS FROM MEETING HELD ON 15 JULY 2016
A.
Amendments to the FRSC Rules of Procedure
The FRSC Rules of Procedure outlines the due process followed by the FRSC in the
development of Financial Reporting Pronouncements (FRPs) and Financial Reporting
Guidelines (FRGs). It also outlines the administrative procedures followed by the FRSC in
performing its duties.
At this meeting, the FRSC considered amendments to the FRSC Rules of Procedure as
agreed at its July 2016 meeting. The FRSC members agreed to include a clause which will
provide the FRSC with the discretion to deviate responsibly from the Rules of Procedure
when considered necessary. Any deviations will, however, be approved by the FRSC.
The FRSC also agreed that the Rules of Procedure needs to explain how frequent the
pronouncement will be reviewed, and will therefore be a working document.
B.
Reduced Disclosure Framework
The Chair of the Financial Reporting Technical Committee (FRTC) shared feedback on the
development of the draft Discussion Paper on the Reduced Disclosure Framework as
prepared by the FRTC sub-committee. It was noted that the draft pronouncement was
developed on the basis of the United Kingdom’s FRS 101, and that members of the subcommittee were of the view that the Framework should be considered for wider application
by preparers, not only to wholly-owned subsidiaries.
The FRSC members debated the proposed pronouncement and agreed that it should be
amended to include questions and explanations that seek input from stakeholders. The
objective and scope of the proposed Disclosure Framework should also be elaborated, and
it should be clear that the objective of the proposed Disclosure Framework is to enhance
cost effectiveness and efficiency for entities that fall within the scope. The proposed
Disclosure Framework should also include criteria that could be applied by entities for
disclosure exemptions.
It was also agreed that the Discussion Paper should make reference to the amendments
that need to be made to the Companies Act Regulations in relation to the FRSC’s mandate
and function. The proposed Discussion Paper should also highlight that the FRSC’s
mandate is limited to companies in the Companies Act.
The proposed Discussion Paper will be brought back to the May 2017 meeting for
consideration by the FRSC.
C.
Financial Reporting Pronouncements and Guidelines
The FRSC considered comment received from stakeholders
pronouncements that were previously issued for comment:
on
the
following

Financial Reporting Guideline on Summarised Financial Statements

Financial Reporting Pronouncement on Substantively Enacted Tax Rates and Tax Laws
Under IFRS and IFRS for SMEs

Financial Reporting Pronouncement on The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction Under IFRS in the South African Pension
Fund Environment

Financial Reporting Pronouncement on Accounting for Black Economic Empowerment
(BEE) Transactions Under IFRS

Financial Reporting Pronouncement on Accounting for Black Economic Empowerment
(BEE) Transactions Under IFRS for SMEs.
After considering the comment and proposed amendments following the FRSC’s due
process, all the pronouncements were approved.
The FRSC agreed that the pronouncement on Summarised Financial Statements should be
issued as a Financial Reporting Pronouncement rather than a Guideline. A submission will
be made to the Minister of Trade and Industry to approve the five pronouncements as
Financial Reporting Pronouncements.
D.
Ethical taxes
The FRSC considered a paper on the transparency of tax disclosure and tax morality to
consider whether entities are, from a global perspective, paying their fair share of tax in the
environment in which they operate.
The FRSC agreed that the focus of the paper should be limited to the transparency of tax
disclosures. The paper should address the level of tax disclosures that are currently
provided in financial statements to determine if these disclosures are sufficient. Only if it is
concluded that the disclosure requirements in current IASs and IFRSs do not provide
sufficient guidance to ensure transparency, would the FRSC pursue the project further
An update in this regard will be considered by the FRSC at its February 2017 meeting.
E.
Comment letters issued to the IASB
The following comment letters were prepared by the FRTC and issued to the IASB by the
FRSC:

Trustee’s review of structure and effectiveness: Proposed amendments to the IFRS
Foundation Constitution

Definition of a Business and Accounting for Previously Held Interests.
The FRSC also noted that the FRTC do not intend to prepare a comment letter on the
proposed IFRS Taxonomy – Applying IFRS 9 Financial Instruments with IFRS 4
Construction Contracts due to the lack of skill and experience on the topic.
F.
Update on Other Events
Amendments proposed to the Companies Act
The FRSC noted that the Department of Trade and Industry has not yet issued proposed
amendments to the Companies Act. Amendments are likely to be issued early in 2017.
PAFA Conference
Bruce McKenzie attended the Pan African Federation of Accountants (PAFA) Conference in
Kenya on behalf of the FRSC.
Appointments and re-appointment of FRSC members
The FRSC will discuss the appointment of new members, and the re-appointment of existing
members at its May 2017 meeting.
NEXT FRSC MEETING
The FRSC’s next meeting is scheduled for 3 February 2017. Observers are welcome to
attend these meetings, but it should be noted that, because space is limited, observers and
interested parties who want to attend meetings are requested to send an email to
[email protected] for confirmation.
Accessing documents issued by the FRSC
Persons and organisations that are interested in the activities of the FRSC should monitor
the website http://www.dti.gov.za/business-regulations/docs to be advised of the release of
any new Exposure Drafts for public comment.
Participation
The FRSC welcomes participation in the Standard setting process in South Africa, and
therefore encourages stakeholders to be part of this process.
Yours sincerely
Suresh Kana
Chairman of the FRSC
The FRSC acknowledges the contribution of the Financial Reporting Technical Committee
whose membership comprises:
CHAIRMAN
Danie Coetsee
University of Johannesburg
ACADEMICS
Warren Maroun
WITS
Gareth Olivier
Monash/CA Connect
STANDARD SETTING BODIES, REGULATORS and GOVERNMENT
Lindy Bodewig
National Treasury
Jeanine Poggiolini
Accounting Standards Board
Sadhir Issirinarain
IRBA
PROFESSIONAL BODIES
Dr Rashied Small
SAIPA
Daleen MacDonald
SAIBA
Bongeka Nodada
SAICA
COMMERCE AND INDUSTRY
Stephen Brickett
Standard Bank
Brenda Baijnath
SASOL
Samantha Barnfather
Naspers
PREPARERS AND USERS
Tania Wimberley
JSE
Jacob Buys
Eskom
Kilford Gondo
Transnet
AUDITORS
Cynthia Mbili
SizweNtsalubaGobodo
Nita Ranchod
Deloitte
James Luke
EY
Zubair Wadee
PWC
Heather de Jongh
KPMG
Justine Combrink (alternate for Zubair)
Mazars
Theunis Schoeman (alternate for Nita)
Grant Thornton
SECRETARIAT
Ian Mtegha
IRBA Technical Assistant: Standards