Slide 2

Modified Cash Standard 2021_2022

The Public Finance Management Act (PFMA), No 1 of 1999, requires departments to “prepare financial statements for each financial year in accordance with generally recognised accounting practice”. The Treasury Regulations require the accounting officer of a department to ensure that the annual financial statements are prepared on a modified cash basis in accordance with the formats prescribed by the National Treasury.

The Office of the Accountant-General (OAG) in the National Treasury has accordingly developed and issued the Modified Cash Standard (hereafter ‘the Standard’) which sets out the principles for the recognition, recording, measurement, presentation and disclosure of information required in terms of the prescribed formats.

Departments that claim compliance with the modified cash basis of accounting must adhere fully with the principles, presentation and disclosure requirements contained in this Standard in order to achieve fair presentation, and compliance with the PFMA and its regulations.

The Standard comprises of separate chapters for assets, liabilities, revenue and expenditure. More than one chapter may exist for each item depending on the nature and complexity of the topic. Each chapter sets out the recognition, recording, measurement, presentation and disclosure requirements on these items.

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