icaz newsletter february 2016 draft 12 newsletter_february 2016.pdf · maranda, munyikwa,...

ICAZ junior vice president Martin Makaya said promoting accounting will result in honest leadership in companies which will result in their growth."ICAZ gesture is a clarion call to the Ministry of Primary and Secondary Education to elevate accounting as a standalone subject in the primary level," he said. ICAZ would like to encourage students to take up accounting as a subject at high school and eventually at university and sincerely hope these books will help the students to acquire new knowledge and assist the teachers of the subject to improve their work efficiency.

Mr. Makaya said these books are gifts from The Institute, through the Mashonaland District Society of Chartered Accountants with the purpose of realizing the ICAZ vision of being the pre-eminent professional body in the The Institute of Chartered Accountants of Zimbabwe

development and promotion of accountancy, (ICAZ) has set its site on developing the assurance and advisory services, business and accountancy profession from the grassroots level, good governance practices. It is the Institutes desire targeting to grow the profession which is touted as a that the books will go a long way in benefiting key component to economic development.students and improving the learning process for all.

On 22 January ICAZ donated Advanced level The ICAZ junior vice president added that, they were accounting text books to 8 schools in Masvingo aware that most schools are in great need of text province. The beneficiary high schools being; books and that the situation has deprived many Birivenge, Chinorumba, Chiredzi Government, students of studying rights and obstructed their Maranda, Munyikwa, Nyaningwe, Ndarama and

wisdom development. Therefore ICAZ Victoria.as the longest established and largest

ICAZ CEO Matts Kunaka in an body of professional accountants in the interview said the accounting body will country are proud to be able to assist also lobby the Primary and Secondary Masvingo Province by donating some Educat ion min is t ry to inc lude books. accounting as a stand-alone subject at

In the future, resources permitting ICAZ primary education level. "We intend to will continue to donate more books in promote the culture of accounting from order to st imulate prospective tender ages. The profession is chartered accountants as we believe a important to the development of the successful and competitive economy economy as they hold key portfolios in requires the services of chartered various companies and government," accountantshe said.

Sev ious Mushosho, the ICAZ Matts Kunaka said the gesture will also Mashona land d i s t r i c t soc i e t y be extended to other provinces chairperson said the donation will go a countrywide.

long way in promoting accounting in various schools Last year in partnership with its student's society, as CAs have the potential to drive economic CAAS, ICAZ launched a scholarship fund targeted at development.underprivileged students who want to study

Masvingo Provincial Education Director Zedias accounting. Chitiga said the province had registered good

Mr. Kunaka said the fund was a way of promoting the passes in accounting from various schools in the profession and at the same time part of its corporate province hence the donation should be an social responsibility. He however said under the encouragement to sink the culture of accounting scholarship, the society is currently going through from lower grades.the selection process of first beneficiaries.

February 2016 | This publication is not for sale.

In this issue...Promoting The Profession: ICAZ Donates Accoun t ing Books in Masvingo:..........................................01

ICAZ Participates at the Lets Learn-Ngatifunde Career Expo: ...................02

Reminder: Report your CPD Hours For 2015: .................................................02

CPD Calendar for the first half of 2016:............................................02

2016 Winter School Advert.................03

Financial Reporting Implications Of The Amendments To The Labour Act.........04

Letter from the President on ZIMRA obligations......................................09

Fundraising Golf Day set for April........10

ICAZ Promo Shop Clearance Sale....11

Frozen Assets: ..................................12

EDITORIAL

Published by The Institute of Chartered Accountants of Zimbabwe

Chief EditorEdinah R. [email protected]

Design & layoutBrandRepublicCell +263 772391352

can contribute to or advertise in this publication, feel free to contact:

For more information on how you

Edinah Gemu at Integrity House

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Matts KunakaLucille Makwasha

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Published by the Institute of Chartered Accountants of Zimbabwe.Newsletter

I C A Z

want to keep posted on the latest institute news, event and updates? visit www.icaz.org.zw or like us on https://www.facebook.com/OfficialICAZ and follow us on @icazicaz

Promoting The Profession:ICAZ Donates Accounting Books in Masvingo

Masvingo Provincial Education Director Zedias Chitiga and ICAZ Junior Vice President Martin Makaya together with staff and students from Ndarama High School during the Masvingo book donation ceremony.


Published by the Institute of Chartered Accountants of Zimbabwe.

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ICAZ Participates at the Lets Learn-Ngatifunde Career Expo

Reminder: Report Your CPD Hours for 2015The Institute would like to take this opportunity to remind all members (practicing and non-practicing) to report their CPD activities either through the Web-site by the 15th of March 2016. Members are also reminded that failure to comply with the CPD requirements may result in disciplinary action being taken by the Institute.

Besides attending seminars, CPD also comprises of other activities that members do to keep up to date with developments within their professional environment.

CPD is intended to maintain, enhance and broaden members' relevant knowledge and skills to enable them to carry out their professional duties and responsibilities competently and diligently throughout their career.

CPD is for ALL ICAZ members with the exception of retired and inactive members.

CPD CALENDAR FOR THE FIRST HALF OF 2016

Anti-Money Laundering, Indigenization & Long Form Audit Report

• Indigenization (Accounting, Impact on Going Concern for non-compliance and reporting thereof).

• Pathways to Indigenization Unlocking investment and empowerment opportunities.

• New Auditors report-changes, implications and implementation

Date: 16 March - Harare | 17 March - Bulawayo | CPD Hours: 4.5

ICAZ Winter School 2016

Dates: 14 to 17 July - Vic Falls | CPD Hours: 15

ICAZ - Insurance and Pensions Commission (IPEC) Seminar

• Financial Reporting for Insurers and Pension Funds

• New Insurance Act

Date: 20 May - Harare | TBA - Bulawayo | CPD Hours: 4.5

Long Form Audit Report (implementation Challenges), Standardisation on Audit Opinion, Labour Laws and amendments (employer perspective)

Date: 10 June - Harare | TBA - Bulawayo | CPD Hours: 4.5

The Institute was part of the various Chartered Accountant and how organisations that participated at ICAZ supports students to achieve the Lets Learn-Ngatifunde career this career.guidance exhibition conducted at

Present at the ICAZ stand were t h e H a r a r e I n t e r n a t i o n a l members of the Chartered Conference Centre from 18 to 19 of Accountants Students Society February 2016.(CASS) who were there to promote

As part of the exhibition are industry the profession by explaining the related seminars conducted by necessary steps required to di fferent professionals. The prospective pupils.seminars are varied and include

A very big thank you to Art Corp for presenters speaking on their sponsoring ICAZ at the 2016 Lets personal experiences as well as Learn - Ngatifunde Expo.highlighting career prospects,

q u a l i f i c a t i o n s a n d o t h e r requirements.

As part of the ICAZ endeavour to p r o m o t e t h e C h a r t e r e d Accountancy profession the ICAZ CEO Mr. Matts Kunaka did a presentation on what it takes to be a

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Pictures 1 and 2; Lets Learn-Ngatifunde Expo attendees at the ICAZ stand.

NOTICE: ICAZ mourns the death its following members;Rebecca Muchada who died on 4 January 2016. She had been a member of ICAZ since 2011 after training at NMB.Michael Tapera who departed on 13 January 2016. Mr. Tapera had been a member of ICAZ since 1992 after training with Deloitte and Touche. May their souls rest in peace.

Theme:

Taking Ownership of Our Zimbabwe’s Future

Winter School Banking Details:

For more details about the event, please contact;

Contact No: VoIP: Mobile:

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Single: $1,650.00

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The objective of this article is to assess the financial reporting

implications of the amendments to the Labour Act, particularly

the Sec 12 amendments. There is a strong call for all entities to

provide for the minimum package for all employees employed

from the effective date versus the notion that only entities who

are contemplating or in the process of retrenchment should

provide. Hence, the reason for the wider debate and therefore

this article. "Who should provide, when and how much should

be provided for?", is the question!

THE ISSUE: Who should provide, when and how much?

The question on who should provide or who should not provide is

quite a fundamental question in this whole debate. Should all entities

with an employee as of the effective date of the amendment be liable

to record a provision in their financial reports due to these

amendments or not? Or should an entity that has or is retrenching

record a provision for loss of employment? Nonetheless, I do believe

that we need to consider both the legal perspective and the guidance

of the International Financial Reporting Standards (IFRS)

requirements to resolve this issue.

BACKGROUND

The Labour Amendment Act number 5 of 2015 came into force Legal perspective

following President Robert Mugabe's assent to the bill which sailed Let's assess the legal perspective of the amendment to section 12 by

through the National Assembly and Senate last year in response to first understanding what changed and the implications of these

the sacking of thousands of employees following the July 17 changes and the intention as detailed by the Amendment Bill of 2015.

Supreme Court ruling.

The key summary of the amendment directly from the bill were as

The new law effectively comes as a major relief to employees who follows:

were uncertain of their future as most companies were taking Ÿ Contract employment term: This amendment sets out to

advantage of the common law position which allowed employers to protect employees from employers who perpetually renew "fixed

fire workers on three months' notice. The land mark Supreme Court term contracts", so as to avoid obligations that come with

ruling on July 17 in the famous Zuva case reinforced the common law permanent employees, such as longer notice periods,

position which gave equal rights to termination of contract on notice to retrenchment packages and pensions. After a fixed period of

both employers and employees. This had devastating effects on continuous service determined by the employment council, a

employees who had to walk away without retrenchment packages "fixed term contract" employee shall be deemed to be a

regardless of their length of service. permanent employee who will be afforded the same obligations

or entitlement by the employer.

The new act now requires that where there are no agreed terms Ÿ Termination and Compensation for loss of employment: This

between employer and employee or their representatives, a amendment seeks to quickly resolve the current cumbersome

minimum package of not less than one month's salary for every two retrenchment procedure which is a long drawn costly process

years served shall be payable to the employee as compensation for that leaves the employer and employee at loggerheads. This

loss of employment occasioned by retrenchment, among other clause sets out a minimum retrenchment package. They are

issues. factors that shall be considered in coming up with a retrenchment

package where an enterprise seeks to be exempted that will be

Section 12 of the Labour Act chapter 28:01 as amended by the new looked at; such as the ability to pay; relocation and job security for

act, has a transitional provision which stipulates that the law applies the remaining employees (in addition to the current existing

to all employees whose services were terminated on three months' statutory obligations, such as notice pay) by the Retrenchment

notice on or after the 17th of July 2015. (Source: ZBC News article) Board and then the minister.


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Financial Reporting Implications of the amendment to the Labour Act (Chapter 28:01)

ICAZ - OLD MUTUAL FUND RAISING GOLF DAY 29 April, 2016 | Chapman Golf Club, HarareFirst Tee-off: 10:30am | Last Tee-off 12:45pmFee: $200.00 per participating team

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Item No. Amendment Analysis

The direct analysis of the actual legal provisions below assists in understanding the intention and impact of the amendment.

Duration and termination of employmentSec12 (4a) "No employer shall terminate a contract of employment on notice unless--(a) the termination is in terms of an employment code or, in the absence of an employment code, in terms of the model code made under section 101(9); or(b) the employer and employee mutually agree in writing to the termination of the contract or(c) the employee was engaged for a period of fixed duration or for the performance of some specific service; or(d) pursuant to retrenchment, in accordance with section 12C.(4b) Where an employee is given notice of termination of contract in terms of subsection (4a) and such employee is employed under the terms of a contract without limitation of time, the provisions of section 12C shall apply with regard to compensation for loss ofemployment.".

Sec 12 (3a) A contract of employment that specifies its duration or date of termination, including a contract for casual work or seasonalwork or for the performance of some specific service, shall, despite such specification, be deemed to be a contract of employment without limitation of time upon the expiry of such period of continuous service as is -(a)fixed by the appropriate employment council; or(b)prescribed by the Minister, if there is no employment council for the undertaking concerned, or where the employment council fixes no such period;and thereupon the employee concerned shall be afforded the same benefits as are in this Act or any collective bargaining agreement provided for those employees who engaged without limit of time.";

12C Retrenchment and compensation for loss of employment on retrenchment or in terms of section 12(4a)(1) An employer who wishes to retrench any one or more employeesshall-

(a) give written notice of his or her intention-(i) to the works council established for the

undertaking; or……………….(b) provide the works council, employment council

or the Retrenchment Board, as the case may be, with details of every employee whom the employer wishes to retrench and of the reasons for the proposed retrenchment; and

(c) send a copy of the notice to the Retrenchment Board

This specific amendment outlaw termination of employment by notice only with certain exceptions. This amendment takes away the right of the employer to unilaterally terminate an employment contract as and when he/she deems necessary. The contract can still however be terminated in the other four ways/exceptions identified below. The loss of employment referred herein can therefore be as a result of the following:

a. Retrenchment (the practice of laying-off/terminating more than 5 employees at the same time as a measure to restructure a business)

b. In terms of an employment code; - sect 12 (4a) (a)c. The employer and the employee mutually agree in writing to the

termination of the contract; sect 12 (4a) (b)d. The employee was engaged for a perpetual fixed duration or for

the performance of some specific service. Sect 12 (4a) (b).All other four exceptions can arise on a single employment contract, whilst retrenchment normally refers to mass terminations.The amendment also emphasize that a termination of perpetually renewed fixed term contract would also attract the minimum package for loss of employment referred to in Sec 12C.

Sec 12 (3a) now include a contract of employment that specifies its duration is now deemed to be a contract of employment without limitation of time when it passes a certain period, whereas the old Sec (3a) excluded that contract. Note that casual work or seasonal work or performance of some specific service is also deemed to be a contract of employment without limitation of time.

Note a such contract are deemed to be a contract of employment without limitation of time upon expiry of an initial period of continuous service as is fixed by the appropriate employment council; or prescribed by the minister where there is no employment council.

Implication: E.g. 3-year employment contract is signed between employer and employee. The employment council determines that a continuous service of more than 12 months is deemed to be a contract of employment without limit, then whether the employer terminates or the contract expires then the employee has rights to the sec 12 retrenchment package like another permanent employee as per Sec 12C.

The heading appears to refer categorically to termination of employment either by retrenchment or otherwise. Sec 12C in the old Labour Act has a heading called “RETRENCHMENT” only, now it has been amended to “RETRENCHMENT AND COMPENSATION FOR LOSS OF EMPLOYMENT ON RETRENCHMENT OR IN TERMS OF 12(4a)”. This seem merely an addition to the old act of guidance for compensation (otherwise to prescribe a minimum package) to reduce disputes between employee and employer in order to reduce time taken to settle. This amendment also seems to underscore that there are also other ways of termination which results in loss of employment other than retrenchment.

Sec 12C (1) concretises the view that all other noted ways of termination of employment (per Sec 12 (4a)) other than retrenchment are regarded as retrenchment for the sake of applying Sec 12C. Sub-section one also highlights the occurrence of an event of retrenchment (“wish to terminate employment”). This highlights therefore that the obligation to compensate for loss of employment does not exist until there is a “WISH TO RETRENCH” by the employer. It therefore also clarifies that the action to terminate the employment contract referred to is the one caused by the employer and not by employee on his/her own will.Another key observation from sub-section one (a)-(c) is that whilst additional forms of terminations have been included the process required under these sections to be carried-out by the terminating employer retain substantially all the procedures that existed under the old act that referred to RETRECHMENT only. This therefore brings a conclusion that the essence of the act was to curb massive retrenchments rather than to add an additional cost to employers.


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The direct analysis of the actual legal provisions below assists in understanding the intention and impact of the amendment (cont’d)

2) Unless better terms are agreed between the employer and employees concerned or their representatives, a package (hereinafter called the minimum retrenchment package") of not less than one month's salary or wages for every two years of service as an employee (or the equivalent lesser proportion of one month's salary or wages for a lesser period of service) shall be paid by the employer as compensation for loss of employment (whether the loss of employment is occasioned by retrenchment or by virtue of termination of employment pursuant to section 12(4a) (a), (b) or (c)), no later than date when the notice of termination of employment takes effect.

(3) Where an employer alleges financial incapacity and consequent inability to pay the minimum retrenchment package timeously or at all, the employer shall apply in writing to be exempted from paying the full minimum retrenchment package or any part of it to-(a) the employment council established for the undertaking or industry; or(b) if there is no employment council for the undertaking concerned, to the Retrenchment Board; which shall respond to the request within fourteen days of receiving the notice (failing which response the application is deemed to have been granted).

Transitional provisionSection 12 of the Labour Act [Chapter 28:01] as amended by this Act applies to every employee whose services were terminated on three months' notice on or after the 17th July, 2015.

First priority is given to mutually agreed terms between employer and employee which are in favour of the employee as a method of determining the “retrenchment package” for compensating loss of employment. The minimum retrenchment package is only considered where there is no mutually agreed terms or when the terms tabled by the employer are not favourable to the employee. This amendment was a mechanism to try and provide guidance on determination of r e t r e n c h m e n t p a c k a g e a s w e l l a s e x p e d i t i n g t h e negotiation/settlement process to allow business to reposition themselves for survival.It is also quite clear that this amendment does legalise the payment of a retrenchment package which is in excess of the terms of the employment contract. Sec 12(5) of the old act emphasized that the employee is entitled to a notice of termination which was also contractual (e.g. three months' notice for permanent employees). If an employee was terminated without notice the employer was obliged to pay all outstanding accrued contractual benefits including full month salary for each forfeited notice period.

Terminating employment by notice merely meant that the employee is unilaterally given notice by the employer for a period which when it expires the employee would then leave employment without further benefits other than already accrued benefits like leave, outstanding salary, etc.

This amendment effectively levels all employee, be it general or managerial, at the time of termination. Previously, only management, e.g. C.E.Os had contracts that identified their exit packages and none such term for general employees. Therefore, all employees terminated by the action of the employer in ways identified above have a right to at least the minimum retrenchment package of two weeks' salary for every year worked.

The phrase “compensation for loss of employment” does underscore the fact that whilst the minimum package is derived from the period of employment it does not necessarily mean that this benefit is available to all employee as a result of their employment contract. It is benefit that only accrues when there is “loss of employment” due to the “wish/action of the employer” as such the compensation is not available to every employee, especially when termination is initiated by employee, retirement or absconding. Thus this compensation is triggered by a specific event initiated by the employer to terminate employment.

This amendment offers a way out to the employer for not paying the minimum package if certain requirements are met. Total exemption applies on demonstration of financial incapacity to pay the minimum package.The same section also affords the employer extension of payment period if it alleges financial inability to pay timeously.The other key mechanism in this amendment is that it expedites the approval process (only 14 days is given to approval process for a lodged request) for either late settlement or exemption to allow employing entities to carry-on with business without disturbances.

This provision is the “net” mechanism. It is explicit that the amendment above and the related amendments should be applied from 17 July 2015 even if the amendment was passed in September 2015. Thus, an entity that expressed a wish or started retrenchment or Sec 12(4a) termination of employment on 17 July or later is bound by this amendment.


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Item No. Amendment Analysis

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the retrenchment package. A provision is a liability of uncertain

timing or amount. [IAS 37] The provision should be made at the time

that constructive valid expectation is created either through taking

action or communication to those affected.

How should the benefit be classified for as per IAS 19?

Classification of this benefit depends on the cause of obligation as

either a termination benefit or post-employment benefit. IAS 37

refers to retrenchment provisions as a restructuring provision.

This benefit would be classified as post-employment if it meets

paragraph 164 of IAS 19 "where benefits are provided regardless of Deductions from the legal analysis the reason for the employee's departure, the payment of which is It appears that the amendment was directed at the entities that certain but the timing uncertain." As referred in the legal analysis "wish" to retrench or terminate employment as shown above. above in item 1-3 it is clear that the retrenchment package is not Therefore, the key event is termination of employment rather guaranteed nor is it available to all employees. Only the employees provision of services. It is quite clear that retrenchment package is retrenched or terminated as per Sec 12(4a) by the action of the paid only when termination is initiated by employer in forms identified employer receive this package. IAS19.159 and 160 supports the above rather than when initiated by employee (voluntary principle that the employer should be the one who resignation) or other natural termination of terminates as "termination benefits do not include employment like retirement or ill-health. employee benefits resulting from termination of

employment at the request of the employee without IFRS implications an entity's offer, or as a result of mandatory According to IFRS (Conceptual framework, retirement requirements, because those benefits are International Accounting Standards (IAS) 19 post-employment benefits.Employee benefits or IAS 37 Provisions, Contingent

Liabilities and Contingent Assets) an entity should The retrenchment package is therefore a 'termination recognise a liability in its records if it has a present benefits" as per IAS19.8 and 159 which says that obligation as a result of a past event and there is a "termination benefits are employee benefits provided probability of outflow of economic benefits. The in exchange for the termination of an employee's analysis in both item 1-3 in the table above then employment as a result of either:shows that the past event that give rise to the (a) an entity's decision to terminate an employee's obligation is the "wish/action" of termination of the employment before the normal retirement date; oremployment contract as part of a retrenchment (b) an employee's decision to accept an offer of exercise or Sec 12 (4a) event unilaterally by the benefits in exchange for the termination of employment".employer. Thus, an entity that has NOT expressed the will or taken Sec 12C refers to exactly the same case referred to above by IAS action to terminate employment has NO obligating event and as 19.8 and 159, where the employer unilaterally terminates an such has no present obligation as per the Labour Act as amended. employment contract or the employee accepts an offer of the

employer to terminate the contract.Note that the presentation obligation is much more of a constructive

obligation than a legal obligation. Even though the obligation is Classification: Thus, the retrenchment benefit shall be classified as embodied in the Labour Act, the actual present obligation arises a termination benefit according to IFRS. when the employer raises expectation in those affected (employees)

that it will terminate their contracts from which it should pay a Recognition: IAS 19.165- An entity shall recognise a liability and retrenchment package as per the above amendment. [IAS 37.72 and expense (Debit (Dr) employee benefits (P&L), Credit (Cr) Provision IAS 19.167] IAS 19.159 states that the event that gives rise to an for termination benefit) for termination benefits at the earlier of the obligation is the termination of employment rather than employee following dates:service. • when the entity can no longer withdraw the offer of those benefits;

andWho should recognise and when? • when the entity recognises costs for a restructuring that is within The entity that has terminated or has raised a valid expectation of its the scope of IAS 37 [Refer: IAS 37 paragraphs 70–83] and intention to terminate employment should recognise a provision for involves the payment of termination benefits.

Financial Reporting Implications of the amendment to the Labour Act (Chapter 28:01) (cont’d)

It is quite clear that retrenchment package is paid

only when termination is initiated by

employer in forms identified above

rather than when initiated by employee...

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21 - 22 April 2016 at the Rainbow Towers Harare, Zimbabwe

For more info contact [email protected] or [email protected]

or simply click here to register



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Measurement that the key cause of divergent views is the natural bias of the role or

An entity shall measure termination benefits on initial recognition, circumstance of the speakers. Employers speak on their side whilst

and shall measure and recognise subsequent changes, in employees speak for themselves, therefore emphasizing the

accordance with the nature of the employee benefit, provided that if importance of unbiased and careful technical analysis of the issue. I

the termination benefits are an enhancement to post-employment had the privilege to have reviewed a number of legal opinions and

benefits, the entity shall apply the requirements for post-employment received presentations from the learned colleagues from the law

benefits. Otherwise: side (lawyers) about the same issue. Some called the amendment

(a) if the termination benefits are expected to be settled wholly "absurd" whereas others strongly believe it may be a contravention

before twelve months after the end of the annual reporting period of the constitution (the supreme law of the land), especially if one is

in which the termination benefit is recognised, the entity shall an employer who has to pay a minimum package if they terminate a

apply the requirements for short-term employee benefits. contract.

(b) if the termination benefits are not expected to be settled wholly

before twelve months after the end of the annual reporting Whilst anyone else or my perception of the constitutionality of these

period, the entity shall apply the requirements for other long-term amendments does not matter in determining the IFRS implications of

employee benefits. the labour amendment, I am therefore confident of the conclusions I

The benefits should be measured at cost of the retrenchment have reached below after extensive debate and technical analysis

package as settled-for by the employer and the employee. as detailed above, which are that:

Consideration of time value of money is only done if the payment or • only entities that have either terminated or in the process of

part there-of is done after twelve months at a market discount rate. termination by retrenchment, in terms of employment code,

Note: Care should be taken on determination of the cost of the employer and employee mutually agreement, the employee was

retrenchment package, i.e. an entity cannot easily default to the engaged for a period of fixed duration or for the performance of

minimum retrenchment package as per Sec 12C if its practice has some specific service or pursuant to retrenchment, should

been to pay a higher figure before as that could be contested in court recognise a provision for termination costs as required by IAS 19

by employees as change of policy. • both the provision and the related expense should be measured at

cost, unless the payment is due after twelve months in which case

Note, the minimum package favour employees who are long serving time value of money should be considered

(two weeks' salary X N years of services) whereas the three months' • the retrenchment cost should be disclosed as per IAS 1, IAS 37

salary of the notice period could be preferred by the new employees. and only IAS 24 if relevant

Each entity has to define its basis of determining the package to

avoid such court battles. Also, the final salary is normally expected to I also hasten to say that employing entities should review their

be used to determine the minimum package and this could be policies regarding this issue and make sure that necessary

another area of contention such that it needs a policy to be defined measures have been taken to address any exposures.

accordingly. I therefore hope that the mist has been lifted and you shall address

this issue accordingly in preparing financial statements or in

Disclosure performing the 2015 audits.

There are no specific disclosure requirements of termination

benefits, however, IAS 1 requires disclosure of the employee benefit For any queries and or comments please contact Embassy at ICAZ

expense as part of the profit before tax note, whilst IAS 24 requires [email protected] or place

disclosure of key management personnel benefits and IAS 37 your query on the ICAZ website

requires disclosure of material provisions at the reporting date. Technical Helpdesk. Thank you for

[IAS19.171] reading.

Concluding Remarks

Whist this is a highly contentious and emotional issue; I have found

Article prepared by

Anesu Daka CA (SA) (Z),

CAA CEO and ICAZ Technical Advisor.

Financial Reporting Implications of the amendment to the Labour Act (Chapter 28:01) (cont’d)

This edition shows that the developments at the global and regional level underlined the economic context under which the Zimbabwe economy operated in 2015. The special feature of this edition focuses on Special Economic Zones (SEZ)

expected to boost the Zimbabwean economy.

ZEPARU Economic Barometer Volume 19 is now out!

CLICK HERE TO DOWNLOAD

THE PUBLICATION



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To Members,

At the last Winter School held in Dubai, members were appraised of

the potential obligations from the Zimbabwe Revenue Authority

(“ZIMRA”) for failure to collect Value Added Tax (VAT) from members

on subscription billings. We would like, in this newsletter, to provide

members with an update of the current status as well as to answer

some commonly asked questions.

We have lodged our appeals with the relevant authorities to consider

our contribution as a body to the economy and exempt the Institute

from the retrospective application of the current interpretation of the

VAT Act. However, we have proceeded to bill members a that we now enjoy. This legacy has seen the Institute build a

supplementary invoice because as we continue with our appeal reputation of impeccable standing in the global markets which we are

efforts, we are required to make monthly payments to ZIMRA to meet all extremely proud and feel so accomplished that we have achieved.

this liability. The billing is not a voluntary requirement for current There will be times, such as the time we are in now when we are called

members but is of equal standing to all other billings that are done by to serve our Institute because we owe it to those that will come after us.

the Institute. There have been appeals for special consideration by

certain categories of members, such as pensioners, that are being Foreign members and new members, for instance, have enquired why

considered favourably. There are many specific questions that we they should contribute the VAT liability when in fact foreign members

have received from members that we have answered directly and if are not levied VAT. Today we enjoy the standing and reputation of

you have any queries about this billing please do not hesitate to ICAZ because others before us have made impeccable contributions.

contact the secretariat. I appeal to foreign members and new members in this light. This is not

the time for us to be looking at who to blame in these circumstances.

The Institute as a 100 year old institution has not levied VAT on History has shown that those who shoulder the responsibility of their

subscriptions since its inception based on its understanding of the time determine the future. This is our time!

legislation with respect to VAT for organisations that are involved in

training activities. We believed the basis of this understanding to be Since I qualified to be a member of ICAZ, I have been involved in its

sound. This has not been challenged, until now. The nature of taxation various Committees and structures for the last 15 or so years. For

and its related principles is that its interpretation, philosophy and many others like me this contribution is a deeply personal contribution,

understanding can change over time. If we could apply the principles for no pay and sometimes no recognition at all. It is at the expense of

fairly and equitably in the manner certain members have suggested, the pressure of the responsibilities we shoulder at our places of

this liability should accrue to all members, past and present, who have employment, time with our families and friends, all for the good virtue

enjoyed the qualification offered by ICAZ but are not contributing of an Institute that has given us so much. I therefore would like to

towards payment of the liability. However, this is not possible and it is make a personal appeal to you as a member of our esteemed body to

the current members who are faced with this burden. stand with us in this time. We owe it as our legacy to those who have

come before us and those that will come after us!

We owe our legacy as an Institute to many people, whose

contributions, we will never know or will ever be acknowledged in any Kind regards,

public forum. Nearly a 100 years have gone into building the brand Roy


Letter from the President

on ZIMRA obligations

ICAZ President Roy Chimanikire


NewsletterI C A Z

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The ICAZ – Old Mutual fundraising Golf day will be held on the

29th of April 2016 at Chapman Golf Club with the aim of ANCHOR SPONSOR - $3,000.00

raising funds towards the ICAZ Foundation and many As an Anchor Sponsor, you will be entitled to advertise on 12

worthwhile charitable causes. holes, tee to green. You are required to sponsor at least

USD3,000 and can partly brand the prize presentation room

ICAZ Chief Executive Officer, Matts Kunaka expressed his for the cocktail. Your company will also be entitled to enter 3

gratitude towards the continued support for this initiative by teams for the competition at no additional cost.

organisations and individuals. "It is gratifying to note that the

event has been growing from strength to strength since its KEY SPONSOR - $1,500.00

inception. This is attributed to the support we continuously As a Key Sponsor, you will be required to sponsor at least

receive from companies and individuals towards this worthy USD1,500 and entitled to advertising exposure on 9 holes,

cause.” tee to green. Your company will also be entitled to enter 3

teams for the competition at no additional cost.

Part of the proceeds from last year's event were used for the

purchase of a Motor Vehicle and other for the Rose of Sharon PRIZE SPONSOR - $500.00

Welfare Organisation as well as the donation of accounting As a Prize Sponsor, you will be required to sponsor at least

textbooks to 10 schools in Masvingo Province. $500 to be channeled towards prizes. You will be entitled to

advertising exposure on 6 holes, tee to green.

Meanwhile, plans to broaden the beneficiaries of ICAZ

foundations are underway. Be part of us in our bid to make a difference in the community

we live. We envisage the event to be competitive and

The following sponsorship packages are available for this enjoyable while getting the opportunity to meet old friends and

year's event; business partners, make new ones and most of all, the

chance to make a difference in the lives of those less

Buy your insurance and banking products the smart way and help ICAZ in the process.

Click here for more info.

Fundraising Golf Day Set For April

https://www.icaz.org.zw/imisDocs/MORE_DETAILS.PDF

PROMOSHOP

Every thing must go


NewsletterI C A Z

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frozen 2016 Masvingo Book Donation + Lets Learn-Ngatifunde Career Expo

2

4

6

1

3

5

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1 ICAZ Mashonaland District Society Vice Chairperson Sabina Chitehwe, ICAZ CEO Matts Kunaka & ICAZ Junior Vice President Martin Makaya follow proceedings at the handover ceremony in Masvingo

2. Victoria High School receiving their donation

3. Mucheke High School receiving their donation

4. Some of the beneficiaries of the ICAZ donation in Masvingo during a career guidance session.

5. High school students at the ICAZ Lets Learn-Ngatifunde stand.

6. Hatcliff High school students at the ICAZ stand.

7. Seke 5 high school students receive information at the ICAZ stand.

Your opinion matters!We appreciate your feedback and comments regarding this and other publications by ICAZ. Please feel free to email your opinions to [email protected]

icaz newsletter february 2016 draft 12 newsletter_february 2016.pdf · maranda, munyikwa,...

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