Accounting standards evolve to reflect how businesses operate — and 2025 brings two key updates that every South African organisation should note:
- GRAP 104: Financial Instruments, effective 1 April 2025, reshapes how public-sector entities classify, measure, and disclose financial instruments.
- ISA 570 (Revised): Going Concern, refines auditors’ responsibilities when assessing whether an organisation can continue operating for the foreseeable future.
Even if you’re not in the public sector, these changes influence how auditors evaluate risk and what information management must provide.
GRAP 104: Clarity and Consistency in Financial Instruments
- GRAP 104 aligns closer to IFRS 9, demanding clearer classification and measurement. Key shifts:
- Three measurement categories – amortised cost, fair value through profit or loss, and fair value through other comprehensive income.
- Expected Credit Loss (ECL) model replaces incurred-loss, making impairment more forward-looking.
More detailed disclosures on credit risk, liquidity risk, and market risk.
Who it affects: municipalities, government departments, public entities, and NGOs that report under GRAP.
Why it matters: finance teams must review their policies now to ensure assets and liabilities are classified correctly before audits begin.
ISA 570 (Revised): Strengthened Going-Concern Assessments
- ISA 570 requires auditors to challenge management’s going-concern assessment more rigorously.
Expect: - Enhanced documentation of management’s cash-flow forecasts and risk analysis.
- Explicit reporting in audit opinions when material uncertainty exists.
- Board accountability for identifying mitigating actions (funding, restructuring, cost control).
For clients: this means early conversations with your auditor are vital — especially if you’ve faced liquidity strain, delayed payments, or funding changes.
What SC Audit Recommends
✅ Review accounting policies for financial instruments by December 2025.
✅ Prepare forward-looking cash-flow models with assumptions and scenarios.
✅ Educate finance staff and audit committees on these changes.
✅ Use a pre-audit consultation to test compliance before year-end.
Want a smooth transition to GRAP 104 or need help reviewing your going-concern processes? Contact SC Audit to book a technical update session with our partners.
Frequently Asked Questions
What is GRAP 104 and who does it affect?
GRAP 104: Financial Instruments is a new accounting standard effective 1 April 2025 that reshapes how public-sector entities classify, measure, and disclose financial instruments. It affects municipalities, government departments, public entities, and NGOs that report under GRAP.
What are the key changes under GRAP 104?
The standard introduces three measurement categories — amortised cost, fair value through profit or loss, and fair value through other comprehensive income. It replaces the incurred-loss model with an Expected Credit Loss (ECL) model and requires more detailed disclosures on credit, liquidity, and market risk.
How does the revised ISA 570 change going-concern assessments?
ISA 570 (Revised) requires auditors to challenge management’s going-concern assessment more rigorously. Expect enhanced documentation of cash-flow forecasts and risk analysis, explicit reporting when material uncertainty exists, and stronger board accountability for identifying mitigating actions.
What should private sector companies know about these changes?
Even if you are not in the public sector, the enhanced scrutiny in going-concern assessments under ISA 570 affects all entities. Auditors will ask more probing questions about cash-flow forecasts, and management should prepare detailed forward-looking models with clear assumptions.
How can organisations prepare for these 2025 accounting standard changes?
Review accounting policies for financial instruments, prepare forward-looking cash-flow models with assumptions and scenarios, educate finance staff and audit committees on the changes, and schedule a pre-audit consultation to test compliance before year-end reporting begins.
SC Audit is part of the Schoemans Group that includes Schoemans – Chartered Accountants in Cape Town and Acrede – Quality Auditing and Tax Consulting.