The Nkonki Technical Department assists other practices by providing insight into the more complex rules and regulations governing the practice of auditing.

The Technical Department houses Nkonki's extensive library of auditing and related reading and research matter and is tasked with the management and dissemination of the information contained in these numerous works.

Through access to the skills of the staff in the Technical Department Nkonki is able to offer clients the most up to date and relevant opinions during any and all auditing situations.

Technical desk contents:

• Download Nkonki's tax guide! Get it here [in PDF]
• IFRS 3 Accounting for Business Combinations
• IFRS 4 Insurance Contracts
• IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
• IFRIC draft interpretation D5 (ED 175) Guidance for the inclusion of items in the results of operating activities (SAICA circular 3/2004)
• IFRS 2 (AC 139) Share-based Payments has now been issued
• Exploration for and Evaluation of Mineral Resources (ED 171)
• Summary of the main changes to the Revised International Accounting Standards Issued in December 2003

• IFRIC Draft D9 (ED 184) Employee Benefit Plans with a Promised Return on Contributions or Notional Contributions
  An employee benefit plan with a promised return on contributions or notional contributions is a defined benefit plan under IAS 19 (AC 116). The plan liability for a benefit that depends on future asset returns shall be measured at the fair value at the balance sheet date of the assets upon which the benefit is specified. No projection forward of the benefits shall be made, and discounting of the benefit is not therefore required.

• Proposed Amendments to IAS 39 (ED 185) Transition and Initial Recognition of Financial Assets and Financial Liabilities
  Guidance is currently given on when an entity can recognise gains or losses on initial recognition of financial instruments. However, it is accepted that on transition to IFRSs retrospective application to 'day 1' gain or loss recognition requirements may be difficult and expensive. Retrospective application diverges from the requirements of US GAAP.
  The proposed amendments to IAS 39 (AC 133) will allow entities a choice of applying the 'day 1' gain or loss recognition requirements in IAS 39 (AC 133) either:
  (a) prospectively to transactions entered into after 25 October 2002 (a US GAAP date), or
  (b) retrospectively as required by IAS 39 (AC 133).

• Proposed Amendments to IAS 39 (ED 186) Cash Flow Hedge Accounting of Forecast Intragroup TransactionsThe proposed
  The proposed amendments clarify that in consolidated financial statements a group can designate as the hedged item, in a foreign currency cash flow hedge, a highly probable forecast external transaction denominated in the functional currency of the entity (eg subsidiary) entering into the transaction, provided that the transaction gives rise to an exposure that will have an effect on consolidated profit or loss (ie is denominated in a currency other than the group's presentation currency)

• Amendments to IAS 39 and IFRS 4 (ED 187) Financial Guarantee Contracts and Credit Insurances
  The ED proposes that Financial Guarantee Contracts and Credit Insurances should be accounted for under IAS 39 (AC 133) rather than IFRS 4 (AC 141). The proposals would require the issuer of a financial guarantee contract to measure the contract:
  (a) initially at far value. If the financial guarantee contract was issued in a stand-alone arm's length transaction to an unrelated party, its fair value at inception is likely to be the premium received, unless there is evidence to the contrary.
  (b) subsequently at the higher of (i) the amount determined in accordance with IAS 37 (AC 130) and (ii) the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with IAS 18 (AC 111).
  These requirements would apply even if the contract meets the definition of an insurance contract in IFRS 4 (AC 141).
  For a stand-alone financial guarantee contract issued in an arm's length transaction to an unrelated party, the main practical effect of the proposals is the requirement to use IAS 37 (AC 130) to determine whether an additional liability should be recognised. The requirements of IAS 37 (AC 130) are tighter than those contained in IFRS 4 (AC 141).
  The proposals could have a more significant effect for financial guarantee contracts that are not issued in an arm's length transaction to an unrelated party and for financial guarantee contracts embedded in other contracts.

• IFRS ED 7 (ED 188) Financial Instruments: Disclosures
  The ED proposes to place all disclosures relating to financial instruments into one Standard. The effect of the ED will be that all entities (whether they are Banks, Insurance companies, financial services companies or any other entity) which have financial instruments must meet the disclosure requirements of this proposed Standard. All disclosure requirements of existing Standards relating to financial instruments will be incorporated into this new Standard with appropriate amendments. Proposed application date is on or after 1 January 2007.

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