Civil rights activist Jesse Jackson famously said: "At the end of the day, we must go forward with hope and not backward by fear and division." Turbulent times induce fear and uncertainty in all but the strongest individuals, and strength in unity is therefore one of the most effective ways to counter the divisive impact of all the changes during the past year and the uncertain outlook of the year ahead.
While business leadership, a balanced life, outstanding client service and efficient processes are critical for success,they mean nothing if the firm is not sufficiently profitable to make investments for the future and compensate its most important resource, the staff who are performers.
There are many debates and reasons why compilers of financial statements for small to medium sized enterprises (SMEs) do not account for deferred tax - these range from it not adding value to the financial results of the business, to it being too difficult a concept to understand and implement. The focus of this article is on two critical issues relating to deferred taxation; namely compliance to the accounting standards and the cash flow benefits.
Tomorrow's modern office spaces will be a world of pause rooms, lounges, hot desks and standing stations - and that's just for when employees are physically in the office and not working remotely. It all points to a corporate culture that is changing and an outlook that accepts that offices as we traditionally have known them are soon to be a thing of the past.
There are many debates and reasons why compilers of financial statements for small to medium sized enterprises (SMEs) do not account for deferred tax - these range from it not adding value to the financial results of the business, to it being too difficult a concept to understand and implement. The focus of this article is on two critical issues relating to deferred taxation; namely compliance to the accounting standards and the cash flow benefits.
The term amortisation and depreciation is often used interchangeably as both are used so as to reflect the assetu0027s consumption, expiration, obsolescence or other decline in value as a result of use or the passage of time. However, the fundamental difference is that depreciation represents the decline in future economic benefits embedded in the tangible assets through use, while amortisation implies writing off of the cost of the intangible asset, such as goodwill, patents, trademarks, licences, etc. Depreciation is recognised as a provision and is recorded in as accumulated depreciation, while amortisation is a direct write-off against cost of the asset. In some instances it may be acceptable to account for the amount via an accumulated amortisation account.
The IASB has published 'Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts' which makes narrow scope amendments to IFRS 4 'Insurance Contracts' ('the Amendments'). The Amendments provide temporary accounting solutions for entities that issue insurance contracts for the practical challenges of implementing IFRS 9 'Financial Instruments' before the forthcoming insurance contracts Standard.
Effective cash flow management is the cornerstone of any successful business and efficiently tracking and managing money as it goes in and out of the business, as well as proper budgeting, may mean the difference between operating a thriving company or closing your doors. Ettiene Retief, Professional Accountant and Tax Specialist at FTR Tax and Corporate Administration points out that cash flow is a fundamental aspect of any business, regardless of its size. Obviously, the larger the business, the more extensive the resources and the more a company may be able to leverage their capital, but ultimately, cash flow is a universal problem and all businesses have to manage and track their spend or face dire consequences.
Financial reporting is a critical tool in informing shareholders, the board and wider investment community of the financial status of an organisation. The information reflected in statements needs to be reliable to drive effective planning and enable sensible decision-making. However, there is still a number of areas where financial reporting falls short, which impacts on the ability of executives and investors to make informed decisions.
South African JSE-listed companies are widely regarded by foreign investors as among the best governed in the world's emerging economies, a fact that has been extremely beneficial to the country. The benefits are equal for non-listed SMMEs and family-run businesses that follow the same sound governance practices and principles, fostering stakeholder confidence, sustainability and growth.
Social media tools make it easy for professionals and businesses to stay in touch with their influencers, peers, and clients. It is also a great reputation management tool - if used correctly.
Diversity management is vital to organisation growth in today's very competitive marketplace. A diverse workforce can bring about productivity and competitive advantage. However, it is vital that the organisation understands diversity and knows how to implement, monitor and report on diversity and, consequently, use it to its advantage.
Guilty by association is an ad hominem fallacy which, if taken lightly could be the end of the noble accounting profession as we know it. When you belong to any profession, you become an involuntary ambassador for all under the banner. When days are good we thrive on the exposure. We act with pride and never pass on the opportunity to bask in the glory. How, then, do we deal with being associated to the bad apples in the profession? Surely it is not fair to be painted with the same brush, and be charged guilty by association?
The objective of selecting a depreciation policy is to enhance the quality and fairness of the financial statements - this means that the depreciation must be appropriate to ensure that the correct depreciation expenses are charged against profit, and the carrying amount of the asset fairly reflect the remaining economic benefits embedded in the asset. The question that needs to be addressed is: Does depreciating the asset to a zero value represent fair presentation? The residual value, also referred to as the salvage value, represents the amount that may be recovered through disposal at the end of the useful life of the asset - residual value represents an estimate of the selling price on disposal less the costs to sell. The residual value represents the cost of the asset that should not be depreciated and thus represents the future economic value after the asset has been utilised for its intended purpose - economic benefit is represented by the disposal value at the end of its useful life. The cost of the asset less the residual value (depreciable amount) is the amount that should be depreciated over the estimated useful life.
After a decade as Chief Executive of SAIPA, Mr Shahied Daniels, recognised by the International Accounting Bulletin (IAB) as one of the top 50 most influential people in the global accountancy profession, has handed over the executive reigns. The SAIPA board has appointed Ms Faith Ngwenya as Acting Chief Executive. Mr Daniels has played an instrumental part in the transformation of SAIPA, and as a result, in the accountancy profession. Under his leadership the Institute has grown tremendously and earned a reputation as one of the accountancy bodies of choice. The projects, alliances and partnerships formed during his time at SAIPA forms a firm foundation for the future growth of the Institute and the success of its members.
Today we live in an era of such rapid change and progression that leaders need to work constantly to develop the capacity for continuous change and recurrent adaptation, while ensuring that their identity and values remain constant. The accounting profession is forever evolving and Professional Accountants (SA) need to always be ahead and keep up with the winds of change by strengthening their professional ethics and contributing to the development of a strong economy. SAIPA members have a fundamental responsibility to safeguard and advance the interests of society. This implies acting with trustworthiness, integrity, and objectivity. This responsibility extends beyond a member's own behaviour to the behaviour of colleagues and to the standards of the Institute and the profession.
The end of the year has arrived sooner than expected and it's a moment to reflect on what we have done while finalising the plans for 2017.
When I joined the National Arts Council (NAC), most of the processes were manual and, therefore, cumbersome. There were functions that were outsourced due to internal capacity issues.
Deferred taxation is one of those accounting standards that you either 'love-to-hate', find as a nuisance value, just ignore as if it does not exist or find that it is not applicable to the SME market. The question that needs to be addressed is whether bypassing deferred taxation allows the Professional Accountant (SA) to state that the financial statements comply with IFRS for SMEs.
Competency is a fundamental requirement of a person who claims to be a professional. The professional possesses constellations of knowledge, an acceptable attitude and specific skills that comfort clients and employers with the assurance that they are receiving a quality professional service. One can never undervalue the contribution of a well-informed and trained workforce. Your success lies in improving your competency and that of your staff, which will speak volumes about the quality of your service. It allows you to remain adaptable and competitive, and this contributes to increased efficiency and greater revenue. All this can be achieved with some effort and time.
