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Financial Statements Getting It Right 3

Accounting Standards BoardRef: https://www.asb.co.za/financial-statements-getting-it-right-3/

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Source domain: asb.co.za

Collected on 13 July 2026

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What this means

This document is a technical information note from the Accounting Standards Board (ASB) titled “Financial statements—getting it right 3” (Part 3 – All the money in the bank and…). It summarises the ASB’s review of entities’ compliance with GRAP 2 on Cash Flow Statements and explains that “3 months or less” is not a bright-line test for classifying items as cash and cash equivalents. It provides guidance on the GRAP 2 definition elements (short term, highly liquid; readily convertible to known amounts of cash; insignificant risk of change in value), including examples such as shares and money market fund units not being cash equivalents, and notes that bank overdrafts repayable on demand are part of cash and cash equivalents while bank borrowings are not. The ASB states it will issue a Research Paper outlining its findings in June 2021.

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Read out of this document by Govermate's AI, in its own words. Each one quotes the line it came from — confirm on the official source before acting.

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Part 3 – All the money in the bank and…

The Accounting Standards Board provides an online technical information note explaining how entities should assess cash and cash equivalents under GRAP 2, including the treatment of short-term investments, shares, money market fund units and bank overdrafts.

Who it is for: entities and preparers applying GRAP 2 to cash flow statements
How to act on it: Read the technical information note on the ASB website.

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Part 3 – All the money in the bank and…

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Facts

Reference

https://www.asb.co.za/financial-statements-getting-it-right-3/

Key Takeaways

Document title: “Financial statements—getting it right 3” (Part 3 – All the money in the bank and…).
Subject: GRAP 2 compliance review on Cash Flow Statements and classification of cash and cash equivalents.
Key correction: “3 months or less” is not a bright line; maturity is measured from date of acquisition, not reporting date.
GRAP 2 definition elements: short term/highly liquid; readily convertible to known amounts of cash; insignificant risk of change in value.
Examples: shares and redeemable money market fund units are not cash equivalents due to price/unit fluctuation and unknown cash amounts at acquisition.
Bank overdrafts repayable on demand are part of cash and cash equivalents; bank borrowings are not.
ASB will issue a Research Paper outlining findings in June 2021.
Disclaimer: prepared by ASB Secretariat for information only; not reviewed/approved by the Board.
Accounting Standards Board (ASB)
ASB Secretariat
Board of the ASB
Office of the Auditor-General (OAG) (mentioned in navigation text)