Release Notes. IFRS for SMEs

Transcription

1 Release Notes IFRS for SMEs November 2017

2 Index 1. Executive summary CaseWare File Stability Maintenance of recent files list Year End Close (YEC) or roll-forward Additional search options available for assign mapping Adjusting journal entries SmartSync Digital Signatures Amendments to the IFRS for SMEs Summary of s Amendments to IFRS for SMEs Body corporates Reserve fund Municipal deposits Insurance policy details Statement of performance for body corporates Tax computation for body corporates Other enhancements Summary of s Body corporates General enhancements and defect fixes Contact Us SME Release Notes November 2017

3 1. Executive summary The latest template is critical for preparers of financial s based on the IFRS for SMEs standard due to the wide scope of the amendments to the standard which have a direct impact on the presentation and disclosure, applicable for financial years ending on or after 31 December Extensive disclosure enhancements have been made for users of the Body corporate template, emanating from the release of the new Sectional Titles Schemes Management Regulations of the Sectional Titles Schemes Management Act, 2011 (Act No 8 of 2011). Refer to the CaseWare Success Community for release notes of our previous releases; features included therein form part of this release November 2016 release July 2017 release (Kenya) Below are summarises of some of the main s related to each compliance driver mentioned above. These release notes also include a matrix of all s made and the areas of the financial s impacted. 2. CaseWare 2017 A new version of CaseWare supplements this template release. The most important aspect of this release is the fact that it is only on 64bit operating systems. See below some of the new CaseWare features which (could) directly impact drafting of the financial s. For further features included in this release, click here File Stability CaseWare now supports databases (.dbf/.cdx) up to 4GB, specifically beneficial for extremely large trial balances that were previously not in Working Papers Maintenance of recent files list In prior versions, clearing the recent files list was only possible through the Tools Options General menu; there was no option to remove files (excluding sync copies) on a one by one basis. The following new options have been added to the right-click context menu to simplify this: Remove from list - Use this option to remove the selected file from the recent file list. If the file is a sync file, this option is disabled. Clear unpinned files - Select this option to clear all unpinned files from the registry Year End Close (YEC) or roll-forward A new Auto-Publish feature is available for existing Cloud integrated files when performing a year-end close (YEC). Running the YEC function from either Working Papers or Cloud will now automatically publish the new engagement in the same entity as the previous year s file, simplifying the transition to a new year. 3

4 2.4. Additional search options available for assign mapping Assigning mapping via the Account Assign mappings window has been simplified with additional search options in both the Unmapped accounts and Mapping numbers sections Adjusting journal entries Scrolling in the Adjusting Entries screen is now possible in a locked down file in order to view all line entries SmartSync Exclusive lock Expanded the Exclusive Lock function for Word and Excel documents. When enabled, modifications to the opened document are exclusive to the user. This can be used to prevent s to the document from other SmartSync copies for the duration of the lock. Other users may modify the document once the locked session is closed Synchronisation SmartSync child copies now automatically check for, and transmit any missed synchronization events before they can be deleted. This will help prevent data-loss when clearing out child copies. Depending on the file size, the delete may take longer to execute than in previous versions. SmartSync copies will no longer be deleted when documents are still open. The following warning will now appear when attempts to delete a sync copy with open documents: 3. Digital Signatures Digital signing of the financial s is now possible with this release. SygnIt provides a secure platform and ensures the authenticity of electronic documents. Currently available for - with the rest of launching soon. Visit for more info. 4

5 Amendments to the IFRS for SMEs The IASB issued the amendments to the IFRS for SMEs in May 2015 which are effective for years beginning on or after 1 January The SME template has been adjusted accordingly. The main s of the amendments project are: Items of other comprehensive income are now required to be split between items which may be reclassified and those which will not be reclassified to profit or loss. The revaluation model has been introduced as an accounting policy option for property, plant and equipment. A requirement to disclose investment property on the cost model as a separate line item in the of financial position. The equity method of accounting has been introduced as an accounting policy option to account for investments in subsidiaries, associates and joint ventures in the separate financial s. Changes to deferred taxation, bringing it in line with the principles of IFRS. Ad hoc amendments. 5

6 4.1. Summary of s Amendments to IFRS for SMEs * Running a full financial brings in all the s below. Statement of financial position Statement of comprehensive income Details of the A new line item has been added for Investment property on the cost model. The original Investment property line item description has been expanded to Investment property at fair value A line item for Municipal deposits has been added under Non-current assets. Items of other comprehensive income have been split into items which will not be reclassified to profit or loss and items which may be reclassified to profit or loss. Gains or losses on revaluation of property, plant and equipment and Adjustments to decommissioning, restoration and similar liabilities have been added as items of other comprehensive income. Amendments to the IFRS for SMEs require the separation of investment property on the cost and fair value models. A corresponding separate note has also been provided for completeness along with separate line items on the cashflow. This measurement category is only allowed where the fair value of investment property cannot be determined without undue cost or effort. Amendment requires separation of investment property on the cost and fair value models. Common practice Improved body corporate disclosure. Municipal deposits are commonly recovered over periods exceeding 12 months and are thus required to be disclosed under Non-current assets. Due to the revaluation model being introduced as an accounting policy option for property, plant and equipment. 6

7 Statement of comprehensive income Statement of s in Equity Details of the A line item has been added for Income tax effects of tax rate s and for Income tax effects of prior year over or under provisions in both sections of other comprehensive income. References to the parent have been d to the name of the parent in the section allocating profit or loss and total comprehensive income. Reference to Share of comprehensive income of associates has been d to Share of comprehensive income of equity accounted investments. Revaluation reserve has been added as a new reserve in a separate column in the Enhancement The enhancement allows for circumstances where the to the associated deferred tax resulted from a tax rate or over or under provisions for prior periods. Related mapping has also been added. Enhancement The equity method now allowed as a method of accounting for subsidiaries, associates and joint ventures in the separate financial s. The revaluation model has been introduced as an accounting policy option for property, plant and equipment. Related mapping has also been added. Accounting policies Changes in accounting policies Key sources of estimation uncertainty Sections have been included for the following policy s: Revaluation model Deferred taxation Equity method in separate financial s A section has been added to the key sources of estimation uncertainty for Fair value estimation. These are example paragraphs for the disclosures of s in accounting policies for the most significant impact areas of the Amendments project. Fair valuation is a key source of estimation uncertainty and was needed in the template. Intangible assets Minor wording s regarding the useful life of intangible assets. The Amendments to the IFRS for SMEs have d the useful life of intangible assets from 10 years, to being based on management s assessment, but limited to 10 years where uncertain. 7

8 Investment property Investments in associates/ Investments in joint ventures instruments Property, plant and equipment Investments in subsidiaries/ Investments in associates/ Investments in joint ventures Investments in subsidiaries Details of the Changes were made to distinguish between investment property at fair value and investment property on the cost model and the circumstances under which the cost model may be applied. Other small wording s were also made. An example paragraph has been added when the fair value model has been selected. The paragraph applies to circumstances where a specific investment in associates or joint ventures is measured on the cost model because the fair value could not be determined without undue cost or effort. Minor wording s relating to the undue cost or benefit exemption have been made to the instruments at cost and instruments at fair value subsections. Significant s were made, mainly the incorporation of the revaluation model. General wording s have also been made. The accounting policies for investments in subsidiaries, associates and joint ventures in the separate financial s have been amended to include the equity method as a method of accounting. The accounting policy has been d to include the accounting treatment of investments in subsidiaries which are not consolidated because they are acquired with the intention of disposal within a year. The amendments to IFRS for SMEs require enhanced disclosures when the undue cost or effort exemption is applied. The amendments to IFRS for SMEs require enhanced disclosures when the undue cost or effort exemption is applied. The amended IFRS for SMEs allows the revaluation model as an accounting policy measurement option for property, plant and equipment. Required by the amended IFRS for SMEs. Required by the amended IFRS for SME. 8

9 Foreign ex Deferred tax Details of the The foreign ex accounting policy relating to investments in subsidiaries, associates and joint ventures has been d to include a paragraph explaining that cumulative ex differences in FCTR are not reclassified to profit or loss on disposal of a foreign subsidiary. The accounting policy has been significantly amended to ensure compliance with the requirements of the new IFRS for SMEs. FCTR is one of the components of other comprehensive income which will not reclassify to profit or loss. The amendments to the IFRS for SMEs have significantly aligned the requirements for deferred tax with those of full IFRS. Notes to the financial s Property, plant and equipment Investment property on the cost model NEW NOTE The note has been amended to: Include Revaluation in summary and recon tables. Make the Changes in estimates paragraph suitable to IFRS for SME. Add a subsection for revaluations which sets out the disclosure which is required when the revaluation model is applied. Remove the borrowing costs capitalised section. A new note has been created for investment property at cost. This category was previously included in property, plant and equipment. Defect The s were made to include the revaluation disclosures which are required by the amended IFRS for SMEs. Other minor s were made to improve the look and feel of the note where deemed necessary. Related mapping has also been added. The amendments to IFRS for SMEs require that investment property held under the cost model be presented separately on the of financial position. Related mapping has also been created. 9

10 Investment property Goodwill Details of the Note renamed to Investment property at fair value. Other general enhancements were made to the note including: The recon has been simplified as categories not related to investment property at fair value have been removed. Mapping has also been refined to align to the other asset categories accounts previously mapped hereto have been remapped appropriately. Pledged as security subsection expanded and renamed Investment property at fair value encumbered as security along with an option to disclose encumbered investment property in a related liability note. Inclusion of a separate Restrictions subsection. The note now includes a qualitative description of goodwill as well as a paragraph disclosing the useful life of goodwill. Enhancement The IFRS for SMEs requires investment property to be at fair value unless the fair value cannot be determined without undue cost or effort. Fair value is thus the benchmark treatment. The original Investment property note is used for this category of investment property. Required by the amended IFRS for SMEs. Investments in subsidiaries The recon has also been simplified as categories not related to Goodwill for SME have been removed. Associated mapping has also been deleted accounts previously mapped hereto will be unmapped. A section has been added to the note for subsidiaries which are not consolidated. This section sets out the total carrying values for these subsidiaries to the extent that they are measured at: Cost less impairment Fair value Enhancement The was made in accordance with the amendments to IFRS for SMEs. 10

11 Deferred tax Other financial assets Details of the The major components of the deferred tax balance have been increased to cater for virtually all deferred tax scenarios. The reconciliation of the deferred tax asset or liability has been significantly improved. The reconciliation now specifies where the deferred tax was created (through profit or loss, other comprehensive income or directly in equity) and provides, in detail, the related items which gave rise to the deferred tax movement. The valuation allowance will be removed after the first year of adoption. It is only retained for comparative disclosure. The deferred asset section includes line items for unrecognised tax losses. The subsection on recognition of deferred tax assets has been removed and replaced by a new subsection for Unrecognised deferred tax assets. This new subsection sets out the carrying amounts and expiry dates of the various classes of unrecognised deferred tax assets. Two new sections have been added, with related guidance, for: Investments in shares which are not measured at fair value, and other financial assets which are required to be measured at fair value but have been measured at cost because the undue cost and effort exemption has been applied. automation and Mapping has been added under the liabilities section to support the s. The mapping works with flips and will automatically sort each component of deferred tax as an asset or liability. The user is still able to complete the disclosure manually if preferred. The amendments to IFRS for SME have removed the valuation allowance. The amendments to IFRS for SME require an entity to recognise deferred tax assets with certain limitations and to disclose the unrecognised portions. The facilitates this disclosure. Related mapping has been created. The requirements for recognising deferred tax assets was amended by the IFRS for SME and additional disclosure is now required. The amendments to IFRS for SMEs require additional disclosure when the undue cost or effort exemption is applied to items which would otherwise be measured at fair value. 11

12 Taxation Other comprehensive income Details of the The note has improved significantly resulting from the following: Additional line items have been added to the major components of the tax expense section. Redundant line items have been removed and improvements to wording made. The reconciliation of the tax expense has been expanded to include more reconciling items. The components of the deferred tax expense have been simplified as the deferred tax detail is included in its separate note. A section has been added for the tax expense related to discontinued operations. Changes to the note include the following: Divided into items which may be reclassified to profit or loss and those which will not be reclassified to profit or loss. Inclusion of the movements on the new components of other comprehensive income which were added to the of comprehensive income. Enhancement The s were made to improve the overall disclosure and functionality of the taxation note. The is made to comply with the amendments to the IFRS for SMEs. 12

13 5. Body corporates The Management Rules for sectional titles schemes (or body corporate) as contained in the Sectional Titles Schemes Management Regulations, 2016 has introduced new and revised requirements relating to the annual financial s. These Regulations have been issued in terms of the Sectional Titles Schemes Management Act, 2011 (Act No 8 of 2011) and are effective from 7 October The requirements relating to the preparation of financial s are contained in rules 21, 24 and 26 and thus the s thereto have relevance to auditors of body corporates. Significant disclosure enhancements have been made to the IFRS for SMEs template to account for these s, and can be summarised as follows: 5.1. Reserve fund Reserve fund column added to the Statement of s in Reserves New Reserve fund note created Additional line item added to the Cash and Cash equivalents note to separately disclose the reserve fund bank balance Separate lead sheet included Associated mapping numbers available to cater for the reserve and the bank account 5.2. Municipal deposits Municipal deposits line item included in Non-current assets New Municipal deposits note created 5.3. Insurance policy details Disclosure provided in the Trustee s report as a separate section detailing the policy number, expiry date and replacement value insured A separate (optional) Insurance policy details note created providing the same disclosure 5.4. Statement of performance for body corporates A new of financial performance layout has been developed which caters for the requirements of body corporates. See below an extract of the. 13

14 The can be accessed from the income s Settings and format menu. This only applies if the statutory income has not been swapped with the Detailed income. Take note: this is designed for body corporates and thus uses mapping numbers applicable to body corporates. Ensure that you have mapped to the correct mapping numbers by following the steps below. When creating a new file: 1. In the assign mapping window, select the Body corporate tags. 2. Map to mapping numbers included in the filtered list. Be sure to apply the s. 3. Navigate back to the financial s. The entity-specific mapping warning should not be activated. 14

15 When updating or creating a new file based on client data: 1. After running the or creating the file, navigate to the entity-specific warning icon in the freeze pane of the financial s. If this icon is red, it means that there are accounts mapped to mapping numbers that are not specific to body corporates. 2. Click on the red icon to run the report to identify the mapping numbers with accounts that should be remapped. We advise that only the body corporate-specific mapping numbers be used. If other mapping numbers are used, you may have difficulty balancing the financials, especially if this new is used. A warning has been added to the bottom of the for cases where this may occur. 15

16 Use the Reapply entity settings feature after making mapping to refresh the document Tax computation for body corporates A new tax computation ( ) has been provided in the template and caters specifically for the tax requirements of body corporates. See below an extract of the computation. 16

17 It s important to note that the computation only gives the desired result if accounts have been assigned to the mapping numbers specific to body corporates. Furthermore, this is a computation only and does not have functionality to export to TaxWare as is the case with our Corporate Tax Computation Other enhancements references to Registration number d to Scheme number Significant s to the Trade and other payables and Trade and other receivables notes to include ageing Prepayments and Deferred income notes expanded Independent Auditors Report Report on Other Legal and Regulatory Requirements now incorporates wording as per Rule 26 Trustees Responsibility and Approval and Trustee s Reports wording s related to the new legislation Accounting policies references to the new legislation d 17

18 5.7. Summary of s Body corporates * Running a full financial brings in all the s below. Information Store Headers General Information Independent Auditor s Report Trustees Responsibility and Approval Trustees Report Details of the Local legislative act d to Sectional Titles Schemes Management Act, 2011 (Act No. 8 of 2011) Report to (description) d to reference owners and trustees headers have been d to refer to Scheme number and not Registration number if Body corporate is the entity selected from the information store. References to Registration number to Scheme number Report on Other Legal and regulatory Requirements findings with accounting requirements (rule 26(5)(c)(ii)) Management of body corporate s financial affairs and funds (Rules 26(5)(c)(iii) and (iv)) Some small wording improvements are included with specific reference to the amended Act and Rules. The following sections have been added to the Trustees Report: Insurance policy details Liquidity and solvency New Act reference applies when selection of entity type as Body corporate is made. This is automated throughout the various s, reports and notes in the financial s. Enhancement Enhancement New paragraphs have been added to the report as per guidance provided by SAICA and IRBA, and include specific references to the amended Act and Rules. Disclosure of insurance policy details is required in terms of the new Act and Rules. A separate (optional) note has also been added to disclose this information. Liquidity and solvency tests are required to be performed by owners or trustees. 18

19 Statement of financial position Details of the A line item for Municipal deposits has been added under Non-current assets. Common practice Improved body corporate disclosure. Municipal deposits are commonly recovered over periods exceeding 12 months and are thus required to be disclosed under Non-current assets. Statement of financial performance for body corporates NEW STATEMENT A separate provided for body-corporate specific disclosure, presenting separately the following categories: Income Other income Operating expenses, further grouped into the following categories: - Administration and sundry expenses - Employee costs - Municipal charges - Maintenance Please note: A balance check has been provided on the body corporate Income to identify differences as not all mapping numbers applicable to other entities are incorporated in the new and thus could result in a different profit compared to the standard income. and common practice The new incorporates the new fields and groups recoveries together with their related expenses, allowing users to identify whether shortfalls exist in how specific expenses were recovered. The selection of this is made from the Income Statement s Settings and format menu. The existing statutory income is still available. Statement of s in equity Statement name d to Statement of s in reserves for body corporates Body corporate entities consist of reserves and accumulated surplus and the headings have been amended to reflect this. A column for Reserve funds has been added. This new reserve is accompanied by a new mapping range in equity. Map no:

20 Accounting policies Presentation of annual financial s Revenue Tax expense Details of the Notes to the financial s Municipal deposits NEW NOTE Trade and other receivables Reserve fund NEW NOTE Automation of Act reference which pulls through from the Information store. Updated with content relating to the recognition of levies and recoveries. Sections relating to other entity types have been hidden. Updated with content relating to section 10(1)(e) of the Income Tax Act, Sections relating to other entity types have been hidden. New note specific to body corporates that includes a summary table that allows users to specify the underlying detailed deposits together with example text. The requirements of Rule 26(1)(c)(i) to show the ageing of trade receivables by unit holder have been built into the note. A new note has been added to cater for the requirements of Rule 26(1)(c)(iv) to show amounts available for maintenance, repair and replacement of each major capital item as a percentage of the accrued estimated cost and the rand value of any shortfall. Common practice This note links to the Municipal deposits line item under the non-current assets of the of financial position. Classified by unit holder and aged for the periods such amounts were outstanding. The content of the Reserve fund note includes all the requirements of Rule 26 (1)(c)(iv). 20

21 Trade and other payables Details of the The requirements of Rule 26(1)(c)(ii) to show the ageing of trade payables and creditors have been added to the note. The note allows for disclosing amounts due by the entity in respect of: Creditors generally Prominently disclose amounts due to public authority and local municipality Other entities Classified by creditor and aged for the periods such amounts were owed. Tax computation for body corporates NEW A new tax computation has been provided which includes the following specific requirements for body corporate entities: Levies and recoveries - Exempt in terms of Section(1)(e)(i) of the Income Tax Act of ; Other income - Section(1)(e)(ii) Exempts any receipts and accruals other than levies derived by a body corporate, to the extent that the aggregate of those receipts and accruals does not exceed R Apportioned administrative expenses Tax compliance This tax computation is automated as far as possible. The flexibility to amend amounts and calculations should go a long way in facilitating a fast and effective tax computation for body corporate entities. 21

22 6. General enhancements and defect fixes * Running a full financial brings in all the s below. Blank page before notes Turn on notes with balances s Independent Auditor s Report Accounting Officer s Report Statement of financial position Statement of s in equity Details of the In previous versions when the first note (often PPE) was set to print in landscape, a blank page would appear. This has been resolved with this release. The feature has been enhanced to turn on all notes with balances that pull through from mapping. Introduction paragraph added back to the top of the s page. Automation of reference to net loss and difference between current liabilities and total assets cells in the Material uncertainty related to going concern paragraph Incorrect use of uppercase We in the Other information section when (audit) firm has been selected in the Information Store. The settings and format menu is no longer blank when accessing it through the Document Settings and format menu. Printing the balance sheet over 2 or more pages now shows the correct page references on the s page. Amounts for transfers between reserves pulling through incorrectly to the Other comprehensive income row. Mapping descriptions have also been d to Transfer between reserves to align to the description. Defect Enhancement Previously this was limited to only notes related to balance sheet line items. Defect Defects Defect Defect Defect This is available for new files and new files from client data only. Previously the amounts were duplicated in the Other comprehensive income and Transfers between reserves rows. 22

23 Details of the Notes to the financial s Prepayments Deferred income The note has been enhanced to include a summary table that allows users to specify the underlying detailed prepayments. The note has been enhanced to include a summary table that shows the underlying detailed items of deferred income. Enhancement Enhancement 23

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