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We provide the following accounting services to small and medium size enterprises :
Monthly bookkeeping and submission of statutory returns including VAT and PAYE
Compilation of management financial statements
Management accounting and management reporting
Annual financial statements in terms of the relevant standards
Who can apply the statement of Gaap for SME's ?
The Statement of GAAP for SMEs may be applied by limited interest companies, as defined in the Corporate Laws Amendment Act, 2006 provided that they do not have public accountability as defined in Section 1 of the Statement of GAAP for SMEs. Section 1 paragraph 6 of the Corporate Laws Amendment Act defines widely held and limited interest companies as follows: a) A company is a widely held company: if I. its articles provide for an unrestricted transfer of its shares; II. it is permitted by its articles to offer shares to the public; III. it decides by special resolution to be a widely held company; or IV. it is a subsidiary of a company described in subparagraph (ii), or (iii). b) A company with two or more types of classes of shares is a widely held company if its articles provide for the unrestricted transfer of shares in one or more of these types or classes. c) (delete C) d) A company is a limited interest company if it is not a widely held company. Other entities, which do not have public accountability, as defined in Section 1 of the Statement of GAAP for SMEs, should assess whether it is appropriate to apply the Statement of GAAP for SMEs. Section 1 of the Statement of GAAP for SMEs states: 1.1 The Statement of GAAP for SMEs is intended for use by small and medium sized entities (SMEs). SMEs are entities that: a) do not have public accountability; and b) publish general purpose financial statements for external users. Examples of external users include owners who are not involved in managing the business, existing and potential creditors, and credit rating agencies. 1.2 An entity has public accountability if: a) it files, or it is in the process of filing, its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market; or b) it holds assets in a fiduciary capacity for a broad group of outsiders, such as a bank, insurance entity, securities broker/dealer, pension fund, mutual fund or investment banking entity. Where legal provisions or other regulations require that an entity complies with a specific financial reporting framework other than South African Statements of GAAP, it cannot apply the Statement of GAAP for SMEs, even if it does not have public accountability as defined in Section 1 of the Statement of GAAP for SMEs.
What is the framework for Non - Public entities ?
This is a third-tier reporting framework, providing guidance to entities, including sole proprietors, close corporations and others, which are not required by law to apply any other framework (such as IFRS, SA GAAP or Statement of GAAP for SMEs), and where their financial statements are not regarded as being general purpose financial statements.
How does the framework for Non - Public entities compare to the Statement of GAAP for SME's ?
The Framework for Non-Public Entities is less complex than the Statement of GAAP for SMEs in many respects. The recognition, measurement and disclosure requirements have been specifically aimed at smaller, owner-managed enterprises. The Framework for Non-Public Entities also exempts an entity from applying specific requirements if it requires undue time and costs to implement or apply.
Why was a framework for Non - Public entities needed ?
There is a debate around the level of complexity and cost implications of financial reporting standards for organisations and legal entities with a limited audience. The Corporate Laws Amendment Act (2006) went some way to differentiate between financial reporting standards for Limited Interest and Widely Held companies. The new Companies Bill creates the possibility of various accounting frameworks for limited interest companies. There is also a need to address financial statements of entities and structures other than companies. Findings of specific research commissioned by the South African Institute of Chartered Accountants (SAICA) also indicated an overwhelming need for a third tier of reporting. The research surveyed audit practitioners, small business owners and their managers. The issues raised focussed on the onerous nature and cost effectiveness of applying IFRS and SA GAAP to companies and other entities with a limited number of users. In light of these facts a Working Group was formed that developed the Framework for Non-Public Entities.
Source : SAICA
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