1. Amendments to GRAP 16 and GRAP 17

2. Disclaimer
The views and opinions expressed in this presentation are those of the individual. Official positions of the ASB on accounting matters are determined only after extensive due process and deliberation. 2

3. Amendments to Investment Property and Property, Plant and Equipment3

4. Focus areas affected
Distinction Investment property vs. Property, plant & equipment
Useful lives & residual values
Use of external valuers
Disclosure on WIP
Encouraged disclosures
Repairs & maintenance disclosure

5. Investment property
No amendments to principles – clarify application in GRAP 16
Asset used in production / supply (e.g. social housing, recreational facilities)
→ mandate specified in legislation or similar
Asset contributing to specific good and service in conjunction with other property
Hold asset for disposal
→ part of ordinary course of operations

6. Investment property Clarify application in GRAP 16
Amount of revenue earned:
not important; rather why / how property used
Existence of lease:
in itself does not mean property is investment property
Rent:
does not need to be market related for property to be classified as investment property

7. Property, plant and equipment
Indicator based approach to assess useful lives & residual values
Annual assessment at each reporting date: may be too onerous
Introduction of indicator based approach
List of indicators
Only conduct detail assessment if one or more of indicators triggered

8. Property, plant and equipment
List of indicators
Composition of asset changed
Use of asset changed, because:
Entity changed manner in which asset is used
Entity changed utilisation rate of asset
Decision to dispose asset in future
Technological, environmental, commercial / other changes
Legal / similar limits on use of asset changed
Asset idle / retired from use

9. Property, plant and equipment
List of indicators (cont.)
Asset approaching end of previously expected useful life
Planned repairs and maintenance / refurbishments undertaken or delayed
Changes in environmental factors
Evidence that condition improved / declined
Asset assessed as impaired per GRAP 21 / GRAP 26

10. Property, plant and equipment
Use of external valuers
Independent and external vs. internal
member of valuation profession or another competent expert

11. Property, plant and equipment
Capital work-in-progress
Disclosure of cumulative expenditure capitalised
→ per class of asset
Construction of assets taking significantly longer than expected
Construction of assets stopped
→ reason & if assets impaired
Flexibility in disclosure

12. Property, plant and equipment
Review encouraged disclosures
Eliminated all
Fair values where cost model applied
Assets not utilised during reporting period
Assets retired from active use but not classified as discontinued operation

13. Property, plant and equipment
Repairs and maintenance
Separately disclose expenditure incurred to repair and maintain asset in notes
GRAP 16, GRAP 17, GRAP 103
Include information on specific costs in amount disclosed  comparability

14. Transitional provisions
Amendment
Prospective application
Retrospective application
Separate disclosure on repairs & maintenance on all assets a
Indicator based approach
Disclosure on capital WIP
Use of external valuers (professional valuer or another expert)
More explanations, guidance and examples to distinguish IP and PPE
Deletion of all encouraged disclosures

15. Effective date
Accountant-General approved effective date of 1 April 2016
PFMA years ended 31 March 2017
MFMA years ended 30 June 2017

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Website:
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