Harare – Plenty of earnings action lies ahead, but for now it appears that companies will have to extend their reporting dates as a result of currency reforms introduced by the Reserve Bank of Zimbabwe Governor, Dr John Mangudya in the recent 2019 Monetary Policy statement (MPS 2019).
During the presentation of the MPS 2019, Mangudya made two key pronouncements which are the liberalising of foreign currency exchange, effectively abandoning the disastrous 1:1 exchange rate as well as denominating RTGS balances, bond notes and coins in circulation as RTGS dollars “in order to establish an exchange rate between the current monetary balances and foreign currency.”
Government has thus far gazetted Statutory Instrument (SI) 33 OF 2019 to give the shadow currency, RTGS dollar legal standing.
Effectively, companies need new guidance framework from the Public Accountants and Auditor’s Board (PAAB) before going forward to announce their financial results under the new currency system.
Agro-concern TSL Limited has already set a precedence of what is to come across the business sector by announcing that it will delay publishing its audited financial results for the year ended 31 October, 2018
The company secretary James Muchando informed the company’s shareholders that financial results would be published on the last day of this month and consequently postponed its annual general meeting to a later date.
“The company wishes to inform shareholders that the audit of the consolidated financial statements for the year ended 31 October, 2018 is still in progress pending the issuance of guidance from the PAAB on the functional and presentation currency for the reporting,” Muchando said.
“The guidance will take into account the pronouncements made on 20 February, 2019 in the 2019 monetary policy statement and the subsequent codification of the pronouncements under statutory instrument (SI) 33 of 2019 and the Reserve bank of Zimbabwe exchange control directive to authorised dealers RU 28/2019.”
Crafting of the new PAAB guidelines in essence involves various financial regulators including the RBZ, the Insurance and Pensions Commission, the Zimbabwe Stock Exchange and the Securities and Securities and Exchange.
PAAB is enforced by the Companies Act (Chapter 24:03) which defines basic requirements for accounting, auditing and financial reporting for companies registered under the Act. The Act requires that all companies apply the international accounting standards as adopted by the PAAB.
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