AS 2007 Volume 14 Issue 2

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  • ItemOpen Access
    The disclosure of costs and income on incomplete contracts in the financial statements of contractors
    (University of the Free State, 2007) Le Roux, Felix; Cloete, Chris
    English: The standard and generally accepted guideline for the accounting treatment of revenue and costs associated with construction contracts is AC109/IAS11: Construction Contracts which recognises that contract start and end dates usually fall into different accounting periods. This causes the problem that forms the primary focus of this article namely: the allocation of contract revenue and costs to the accounting periods in which construction work is performed. Critical to the above allocation is the ability to determine percentage of completion of contract and cost to completion at the balance sheet date (reporting date). The important activities in this regard according to AC109/IAS11 are to “measure” and “estimate” reliably. AC109/IAS11 contains detailed guidelines on how these aspects should be dealt with. However questions arise as to who the relevant role players are and how these actions should be performed. It seems obvious that the guidelines used for determining the stage of completion should correspond with the guidelines for on site cost control. AC109/IAS11 gives guidance by stating clearly that the provisions of the statement should be read in conjunction with AC000/Framework: Framework for the preparation and presentation of financial statements. South African literature on the subject is limited to textbooks with detailed guidelines to assist accounting students and qualified accountants. No other discussions or guidelines could be found that are directed at the built environment professionals in general or the contractor in particular regarding the topic of recognition of cost according to formal accounting guidelines. The research on which the article is based attempted to obtain clarification on key aspects from the experts on the subject namely the registered auditors and accountants of contractors. The results of the survey indicated that they interpret AC109/IAS11 to require no other skills than general accounting abilities. It also showed that certain important terms and activities described in AC109/IAS11 are interpreted in ways that differ from how built environment professionals would interpret the same terms. From the study it became apparent that problems in construction accounting and reporting could arise due to the fact that certain guidelines and terms in AC109/IAS11 are not consistently interpreted by all involved. These apparent ambiguities will influence the recognition of costs in different phases of completion of a construction contract.
  • ItemOpen Access
    Reasons for the transformation of facilities management in the public sector
    (University of the Free State, 2007) Buys, Fanie; Tonono, Erol
    English: Facilities managers in the National Department of Public Works (NDPW) have to manage one of the biggest property portfolios in South Africa. This requires a systematic approach to ensure that taxpayers’ monies are not wasted. Research was conducted to determine whether the required policies and expertise are in place or whether there is a need for a transformation strategy in the public sector relating to facilities management. Primary data was collected by means of questionnaires to regional, property and facilities managers in the NDPW. Secondary data was obtained from the literature reviewed in relevant publications. The main findings were that more than half of facilities managers are inexperienced, information management systems are not used extensively and that there is a need for the appointment of properly trained facilities managers in the NDPW.
  • ItemOpen Access
    The role of value management in achieving best value in public sector service delivery in South Africa: a research agenda
    (University of the Free State, 2007) Bowen, Paul; Pearl, Rob; Cattell, Keith; Hunter, Kirsty; Kelly, John
    English: It is common cause that, for the most part, public sector service delivery in South Africa is in a state of disarray. Problems associated with service delivery include shortages of skilled staff, under-spending of budgets, corruption, and a general lack of capacity. Best value in public service delivery is clearly not being achieved. Best Value is an emerging initiative that aims to improve the quality of public services. The basic premise of the Best Value initiative is that the public service should procure services on the basis of value for money rather than on lowest cost. The literature suggests the use of value management with risk management within a project management framework to achieve value for money. This article outlines a research agenda for examining the role of value management in achieving best value in public sector service delivery in South Africa.
  • ItemOpen Access
    Continuing professional development for the quantity surveying profession in South Africa
    (University of the Free State, 2007) Cruywagen, Hoffie
    English: A system of Continuing Professional Development (CPD) was introduced into the quantity surveying profession in South Africa during 1999. After the initial 5-year cycle that ended in 2005, it became clear that the system is not without problems and difficulties. This article investigates the CPD system of the quantity surveying and other professions in South Africa and elsewhere and sets out the perceptions of the participants to the system, specifically registered quantity surveyors. Possible changes and improvements that can be implemented to simplify the current system and make it user-friendlier are also discussed.