Johannesburg, 01 Nov 2017
New Sectional Titles Schemes Management Regulations mandate disclosure requirements for the trustees of body corporates and their managing agents.
CaseWare Africa, a division of Adapt IT and a global leader in auditing and financial reporting software, has released an updated version of its IFRS for SMEs template. The aim is to assist trustees to discharge their extended obligations, in terms of the Regulations, as easily and accurately as possible.
"Sectional title schemes are plentiful in South Africa and it is clear that very few in this sector have really come to terms with the important changes in the new Regulations - even though they come into force for all year-ends falling on or after 7 October 2017," says Jannie Marais, Product Manager: Financial reporting at CaseWare Africa. "We researched the implications extensively, and consulted with the Financial Intelligence Centre, to ensure that trustees and agents do not fall foul of the new regulations."
Marais says that one important change is that special levies now have to be held in a separate bank account. In addition, bodies corporate must provide a five-year plan outlining how the money is to be spent and demonstrating that they have sufficient monies on hand to discharge their commitments.
Auditors will be obliged to ensure the five-year plans are sound and that they are implemented.
Another important change is that sectional title developments of all sizes must now produce audited financial statements. Previously, estates with fewer than 10 units were exempt from this requirement. An added refinement is that financial statements can no longer be prepared and audited by the same firm of auditors, and must be signed off by a registered auditor.
One of the most potentially sensitive of the new requirements is the need for debtors and creditors to provide an age analysis indicating how long the unit holder's outstanding receipts or payments are - this must now be shown in the main accounts, and can no longer be relegated to an addendum. This means that unit owners who are in default will be named, and their impact on the joint financials made clear.
"These are significant changes, with a much wider scope of disclosure. As always, CaseWare has not only researched the changes carefully and by integrating them into our template we are ensuring that bodies corporate and their agents are not caught napping," concludes Marais. "The updated template now also includes an automated tax computation specific to body corporates."
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