2024 JSE Proactive Monitoring Report Findings
13 February 2025
The JSE issued its latest proactive monitoring report on their 2024 financial statement reviews, highlighting several findings focused on the measurement and disclosure of financial instruments.
The thematic (limited scope) reviews concentrated on:
- Credit and liquidity risk disclosures.
- Segmental reporting on material income and expenses. The JSE flagged line items such as cost of sales, inventory, raw materials, employee costs, and selling and marketing as potentially material items requiring separate disclosure.
- IFRS 17 Insurance Contracts application by long-term insurers. Feedback is expected in 2025 as the process is still ongoing.
Some of the common findings highlighted:
- Lack of expected credit loss allowance (ECLs) disclosures:
o Inputs, assumptions, estimation techniques, forward-looking information.
o Explanation of uncorrelated changes in the gross carrying amount and related allowance.
o Omission of ECL reconciliation.
o Default events, write-offs, and enforcement policies not defined and/or disclosed.
o Gross carrying amounts not disclosed by credit risk rating grades.
- Liquidity risk maturity analysis - insufficient time band disaggregation and incorrectly presenting discounted amounts in the analysis.
- Insufficient disclosure and discussion of significant judgments and estimates.
- Cross-referencing to information presented outside the financial statements relevant to the understanding of a financial statement item.
- Interim financial reporting:
o Segment reporting – omission of disclosures required by IAS 34.16A(g).
o Headings and subtotals are not the same as those presented in the financial statements.
o Insufficient explanations of significant events and transactions since the last financial statements.
o Omission of significant related party disclosures.
o Lack of IFRS 13 fair value disclosures for financial instruments.
- Statement of cash flows – In addition to the usual suspects, the inclusion of bank overdrafts within cash and cash equivalents when not an integral part of the cash management practices.
- Revenue:
o Accounting policies - generic and/or incomplete.
o Lack of disaggregated revenue disclosures.
- IFRS 13 deficiencies regarding significant unobservable inputs in fair value measurements, including:
o Partial omission for a specific asset, with one input incorrectly deemed insignificant.
o Complete omission for an entire asset class.
o Overly aggregated presentation, with very wide input ranges.
Be sure to read the full report and list of findings here.
Author:
Anne-Lise Theodore, Senior IFRS Manager
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