Accounting for landfill sites

17 October 2022
Accounting
South African Accounting Academy

Inconsistent accounting by entities involved in waste disposal activities resulted in the development of guidance by the Board.

The Guideline on Accounting for Landfill Sites will be included in the GRAP Reporting Framework for periods commencing on or after 1 April 2023.

From this date the Guideline should be considered by entities that are required to comply with the legislative requirements applicable to general and hazardous landfill sites. The Guideline can, by analogy, also be applied by entities that recognise other rehabilitation provisions. If applied, entities should be mindful of the specific legislation governing these provisions.

The operation, licencing, management and closure of landfill sites in South Africa is highly regulated. The objective of the legislation is to minimise the potential impact that landfill sites can, or may have, on the environment.

Currently, landfill sites are regulated under the Waste Act, that is binding on all spheres of government, and any person that undertakes an activity that produces waste or involves the handling of waste. The Waste Act should be read with the National Environmental Act, Act No. 107 of 1998 that provides the legislative framework for environmental protection.

Click here to download the Guideline:

https://www.asb.co.za/wp-content/uploads/2022/04/Guideline-on-Acc-for-Landfill-Sites-1-April-2022.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

The Waste Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
As an auditor and independent reviewer, you need to consider adherence to this guideline by your clients, as well as any effects related thereto.
The Guideline applies to entities that are required to comply with the legislative requirements applicable to landfill sites

Relevance to Your clients:

The Guideline applies to entities that are required to comply with the legislative requirements applicable to landfill sites
An entity needs to apply judgement when the specific Issued April 2019 8 Accounting for Landfill Sites facts and circumstances relating to its landfill site are different to those explained in the Guideline.
The Guideline can be applied, by analogy, by entities that recognise rehabilitation provisions other than those that arise from landfill sites regulated in terms of the Waste Act and the related regulations, norms and standards. When applying the Guideline by analogy, entities should be mindful of the specific legislation governing those rehabilitation obligations and provisions.

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