The significance of credit risk to financial statement users, such as lenders and

investors, is evident in its direct influence on decision-making processes. Information

in financial statements (including accruals, cash flows, and credit ratings) serves as

valuable indicators for predicting future cash flows and evaluating credit risk (Hsieh,

2021; Minnis, 2011). Through financial statement analysis, users can pinpoint

potential risks linked to lending or investment activities, thereby enabling them to

make informed decisions to mitigate such risks (Liu, 2020).

Explore the recent amendments to the IFRS for SME Accounting Standard in this webinar recording presented by FinRep Consulting and PKF South Africa. In this session we unpack the key updates, practical implications, and their potential impact on financial reporting and compliance. Whether you’re an audit professional or a compiler preparing SME financial statements, this session offers valuable insights to help you stay informed and prepared. 

In his budget speech on 23 February 2022, the Minister of Finance, enacted an amendment to section 20 of the Income Tax Act. The amendment, which limits the utilization of assessed losses, aligns National Treasury’s reduction in the corporate tax rate from 28% to 27%.

National Treasury has indicated that the reduction in the corporate tax rate requires a trade-off by broadening of the tax base in order to achieve overall revenue neutrality. Restricting the use of assessed losses against taxable income (amongst other measures) provides some of the fiscal space required to lower the corporate income tax rate and, as a result, forms part of a corporate income tax package to broaden the base and reduce the headline corporate tax rate in an overall revenue neutral manner.