Purpose and Disclaimer

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					                                       Purpose of these tools

            National Treasury has undertaken this project to provide medium and high capacity
            municipalities with useful tools to assist their finance staff in the preparation of GRAP-
            compliant annual financial statements. The use of these tools is not compulsory but is
            encouraged to ensure uniformity of accounting methods and practices. These tools are
            intended as guidelines for use outside of the financial systems of the municipality and users
            are required to process any journals arising out of their application manually.

            Although the accounting tools have been carefully prepared and tested, National Treasury
            has no control over the use of these accounting tools and disclaims any responsibility for the
            accuracy of the output.

            National Treasury is not responsible for any loss or damage which may arise as a result of
            information in the accounting tools or as a result of application of the information. The
            application of the information is the responsibility of the Municipality and National Treasury
            have taken no responsibility for the application thereof. The accounting tools contain no
            guarantee that the auditors will not conduct the audit procedures which they deem
            necessary to obtain necessary assurance as to the validity, existence, completeness and
            accuracy of information. The accounting tools also contain no guarantee that every IFRS/SA
            GAAP, GRAP, GAMAP issue which may be applicable to the Municipality has been
            identified and addressed.

            These accounting tools should be considered a guideline only and provide no guarantee that
            every issue which may be applicable to the municipality / user has been identified and
            addressed. Furthermore, the application of IFRS/SA GAAP/GRAP is a matter of professional
            judgement, and consequently different interpretations may arise. Consequently, this
            document contains suggested disclosures and calculations. The format and layout of the
            disclosures is not prescribed by any Standard. It is the responsibility of the user of this
            document to check that all formulae are correct and provide the desired results. National
            Treasury is furthermore not responsible for any matter arising out of any changes that were
            made to the original tools after they have been supplied to the user. National Treasury is
            also not responsible for any errors or differences in interpretation arising out of the use of the
            guidelines provided. National Treasury reserves the right to from time-to-time revise or
            update its accounting tools in accordance with new interpretations and changes to the

            Go to:
            Overall guidance

097a5472-b4fd-4ef3-a826-3c83416cf0d0.xls Purpose and Disclaimer                                                  1
                       Accounting tools for municipalities
             Number                 Description                            Purpose

                                                             To provide an example of a lease
                                                             register to maintain detailed record
       A.1.1 & A.1.2    Lease register as lessee             of all leases entered into as lessee

                                                             To determine whether any of the
                                                             leases identified in sheet 1.1 and
                                                             1.2 should be classified as finance
                                                             leases i.t.o GRAP 13 and to
                                                             provide the calculations of
                                                             capitalised finance leases, including
       A.2.1 - A.2.5    Finance lease calculations           an amortisation table etc.
                                                             To straight-line all leases not
                        Straight-lining of operating lease   classfied as a finance lease in
       A.3.1 - A.3.3    payments                             sheet 2.1 as required by GRAP 13

                                                             To provide an example of a lease
                                                             register to maintain a detailed
                                                             record of all leases entered into as
                                                             lessor (assuming all such leases
                                                             would be operating leases in the
       B.1.1            Operating lease register lessor      case of a municipality)
                                                             To straight-line all leases identified
                        Straight-lining of operating lease   in sheet 1.1 as required by GRAP
       B.2.1 - B.2.3    receipts                             13

                                                              To maintain a detailed record of all
                                                              leave days taken by employees and
                        Leave register and calculation of     amount owed by municipality to
       C.1              leave provision                       employees as at reporting date
                                                              To assist municipalities with the
                        Calculation of provision for doubtful calculation of provision for doubtful
       D.1              debts                                 debts as per IAS 39
                                                              To give guidance on how to perform
                        Debtors and creditors                 debtors and creditors
       E.1              reconciliations                       reconciliations

097a5472-b4fd-4ef3-a826-3c83416cf0d0.xls Index                                                        2
                      Accounting tools for municipalities
             Number                Description                           Purpose
                                                          To provide an example on a
                                                          schedule which should be used and
                                                          completed when performing asset
                                                          and inventory counts as at reporting
       F.1             Schedule on asset counts           date
                                                          To give guidance on how to perform
       G.1             Bank reconciliations               bank reconciliations
                                                          To assess useful lives and residual
                       Assessment of useful lives and     values of all PPE as required by
       H.1             residual values of PPE             GRAP 17

                                                          To provide guidance on determining
       I.1             Determining materiality levels     materiality levels in a municipality
                                                          To provide a list of possible key
                                                          supporting documentation to be
                                                          retained by the municipality and
                                                          supporiting documentation required
       J.1             List of supporting documentation   to process transactions preparation
                                                          To provide guidance on
                                                          of an audit file, including working
                                                          papers and schedules to be
                                                          prepared to support figures
       K.1             Guide on audit file                disclosed in the annual financial

097a5472-b4fd-4ef3-a826-3c83416cf0d0.xls Index                                                   3
                      Accounting tools for municipalities
             Number                Description                             Purpose
                                       Other tools identified:
                                                            To provide guidance on disclosure
                                                            required by IFRS 7 which could be
       L.1             Financial instruments disclosure     used in preparation of annual
                                                            To provide guidance on disclosure
                                                            required by IAS 24 which could be
                                                            used in preparation of annual
       M.1             Related party disclosure             financial statements disclosure
                                                            To provide a guidance
                                                          required by IAS 19 which could be
                                                          used in preparation of annual
       N.1             Employee cost disclosure           financial statements
                                                          To assist municipalities on testing
                                                          assets for impairment as required
       O.1             Impairment of assets               by IAS 36
                                                          To provide guidance on how to
                                                          calculate input tax for mixed
                                                          supplies based on the turnover
       P.1             Calculation of VAT - input tax     based method

097a5472-b4fd-4ef3-a826-3c83416cf0d0.xls Index                                                  4
                                                Overall guidance

        1      Read through index and identify which tools will be applicable to the municipality

               When first making use of a specific tool, always read through the "Approach" tab
               first as this will give the user detailed guidance on what the worksheet is all about
        2      and how it should be used.

               Please notice that almost all the tools will have comments to give the user
        3      guidance, e.g.:

                                                                             Note: Please note
                   comments in Excel may be hidden,                          the following...
                 therefore be on the lookout for the small
               red triangle in the top right hand corner of a

               Many of the tools will include illustrative examples and should therefore be
        4      replaced by the municipality's own data

               Many of the tools include predetermined formulae and care should be taken not to
               remove, change or move the formulae as this can result in inaccuracy of data and
        5      the final results

097a5472-b4fd-4ef3-a826-3c83416cf0d0.xls Overall guidance                                              5