The IFRS Interpretations Committee has highlighted three accounting application questions that may interest South African businesses preparing financial statements under IFRS: the treatment of assets that generate returns independently, estimating residual values, and the sale of equity investments measured through other comprehensive income.

The issues were discussed at the Committee’s meeting on 15–16 September 2026 and are covered in a newly published IFRS Foundation update. For now, these are tentative agenda decisions and discussion points. They do not create a new IFRS requirement for businesses.

What the Committee discussed

The first issue concerns assets that generate a return individually and largely independently of an entity’s other resources. This question is relevant to how some businesses assess the presentation and disclosure of assets under IFRS 18, Presentation and Disclosure in Financial Statements.

The second issue relates to estimating residual value under IAS 16, Property, Plant and Equipment. Residual value affects depreciation calculations, asset carrying amounts and the timing of expense recognition. Businesses with significant property, plant, equipment or specialised operational assets may need to review whether their estimates remain supportable.

The third issue concerns the sale of equity investments measured at fair value through other comprehensive income under IFRS 9, Financial Instruments. The accounting treatment of gains, losses and transfers on disposal can affect both the financial statements and the information provided to users.

Why this matters to South African businesses

Most smaller businesses will not be directly affected by all three questions. However, the topics may be relevant to groups, asset-intensive companies, investment entities and businesses with complex financial instruments. They may also matter to finance teams supporting an audit or compiling consolidated financial statements.

The key point is timing. The Committee’s discussions are intended to support consistent application of existing IFRS requirements. They are not the same as a completed amendment or a new standard. Businesses should therefore avoid changing accounting policies solely because an issue has appeared in a tentative agenda decision.

The IFRS Foundation’s update also explains that the Committee’s work helps address application questions and promote consistency in the use of IFRS Accounting Standards. Finance teams can follow the related agenda material and monitor whether the tentative decisions are finalised.

What finance teams should check now

  • Identify whether the business holds material property, plant and equipment where residual-value estimates have a significant effect on depreciation.
  • Review investments classified at fair value through other comprehensive income and confirm that disposal accounting is documented.
  • Flag transactions or assets where returns appear to arise independently from the entity’s wider operations.
  • Ask the accounting adviser or auditor whether any existing judgement is affected by the Committee’s discussions.
  • Keep the current accounting policy in place unless an enacted standard, formal amendment or applicable final agenda decision requires a change.

Practical next step

Businesses with straightforward financial statements can record the update for future monitoring. Companies with material investments, specialised assets or group structures should add the three issues to their technical accounting review file and assess whether additional disclosure or evidence may be needed at year-end.

For help with financial reporting processes, accounting reviews or management accounts, businesses can explore Your Financial Partner’s accounting services.