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There is a recognised need for specialised service providers to assist entities with the preparation of their fixed asset registers for the implementation of the new accounting standards. There are a number of complex issues that need to be understood and addressed before compliance with legislation can be achieved. Some municipalities may elect to resolve these issues themselves, while others may obtain assistance from specialised service providers such as PwC Combined Systems (Pty) Ltd.
It is our contention that due to a number of factors such as possible lack of internal resources, limited skills and time constraints, municipalities do require the assistance of a specialised service provider to identify, verify and evaluate their immovable assets. This will include updating the current fixed asset register in preparation for the implementation of GRAP. The final product will enable the municipality to better fulfil its obligations to the community in respect of their management role with regards to land, buildings and infrastructure assets that are linked to its service delivery responsibilities. Click here to see diagram
In order for the municipality to make transparent and defendable decisions regarding its fixed assets, specific information must not only be available, but must be presented to councillors in such a manner that will inform the decision making processes. Their decisions regarding land, buildings and infrastructure have far reaching effects. It is essential that the integrity of the council’s decision making process is protected and enhanced.
The key decision that a municipality needs to take is when it intends starting the process of preparing for GRAP. We contend the sooner the better, to avoid the unnecessary pressure of prescribed time constraints.