The Frequently Asked Questions (FAQs) are based on queries commonly received from the stakeholders involved with preparation and finalisation of financial statements in accordance with the Modified Cash Standard (MCS).
These FAQ’s should be considered for preparation and finalisation of the Annual Financial Statements for the 2020/21 financial year and reporting periods thereafter (effective from 1 April 2021).
Click here to download the FAQ Document:
Background on the Modified Cash Standard:
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.
You can click here to download the Modified Cash Standard:
Relevance to Auditors, Independent Reviewers & Accountants:
Relevance to Your clients:
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