generally accepted auditing standards reclass threshold

The International Accounting Standards Board (IASB), which issued the amendments to the standards that the APB has endorsed for issue in South Africa as Statements of GAAP, indicated that ‘rare circumstances’ arise from a single event that is unusual and highly unlikely to recur in the near term.Īssets that were classified as held-for-trading or as available-for-sale (measured at fair value through other comprehensive income) that would have met the definition of loans and receivables on initial recognition, had they not been classified differently, can be reclassified to the loans and receivables category (measured at amortised cost through profit or loss), if the entity has both the intention and ability to hold the assets for the foreseeable future or until maturity. However, there may well be ‘rare circumstances’ affecting South African companies that have operations or financial assets in other countries that have such ‘rare circumstances’. The APB is of the view that it is highly unlikely that there are such ‘rare circumstances’ currently in South Africa. Financial assets (other than those that would have met the definition of loans and receivables)Ī financial asset may be reclassified from held-for-trading (measured at fair value through profit or loss) to another financial asset category only in ‘rare circumstances’. Permitted reclassifications – an entity may reclassify a financial asset in the following instances if the financial asset is no longer held for the purpose of selling or repurchasing in the near term (notwithstanding that the financial asset may have been acquired or incurred principally for the purpose of selling or repurchasing it in the near term):Ī. All reclassifications made on or after 1 November 2008 shall be effective from the date of reclassification. Reclassifications may not be applied retrospectively before 1 July 2008. The decision to reclassify a financial asset on or after 1 July 2008, but on or before 31 October 2008, had to be completed before 1 November 2008.

The Accounting Practices Board (APB), the official financial reporting standards-setter in South Africa, approved the Amendments to IAS 39(AC 133) and IFRS 7(AC 144) as amendments to the Statements of Generally Accepted Accounting Practice (GAAP) on 24 October 2008. Due to the urgency of the matter, the IASB suspended process and did not issue an exposure draft to obtain comment on the changes. Accordingly, the IASB issued amendments to IAS 39 – Financial Instruments: Recognition and Measurement and IFRS 7 – Financial Instruments: Disclosure, whereby limited reclassification of certain financial instruments will be allowed subject to adherence to certain requirements. Under this approach, the IASB sought to reduce the difference between International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (GAAP) in respect of the issue of reclassification of financial instruments. The Trustees of the International Accounting Standards Committee Foundation, the oversight body of the International Accounting Standards Board (IASB), recently agreed that the IASB accelerate its response to the credit crisis.

URGENT AMENDMENTS ISSUED ON THE RECLASSIFICATION OF FINANCIAL ASSETS APB APPROVAL

Generally accepted auditing standards reclass threshold