Article 112 of the new uniform act repeals the provisions of the uniform act of March 24, 2000 on the organization and harmonization of company accounting, as well as all previous and contrary provisions of domestic law.
For the first application of the revised SYSCOHADA, transitional provisions have been provided for, notably in article 111-1, in order to prescribe the accounting treatment of asset and liability accounts eliminated or treated differently by the new uniform act on accounting law and financial reporting.
Entities are required to prepare and present their opening balance sheet in revised SYSCOHADA as at December 1.er January 2018 by making the necessary adjustments and reclassifications in an account 475- transitional account linked to SYSCOHADA revision, asset-liability account. The main purpose of this treatment is to avoid impacting opening shareholders' equity, with all the tax and legal consequences that this would entail. The balance of account 475 must then be taken to the income statement for 2018, or spread over a period not exceeding 5 years.
Accordingly, before closing its 2018 financial statements, each entity will have to take stock of the main changes impacting its financial statements for the year ended December 31, 2017, and make the necessary reclassifications and adjustments to the transitional account. By way of illustration, the changes that may lead to corrections to the opening balance sheet are listed below:
- capitalized expenses ;
- redemption premiums and issuance costs ;
- exploration and evaluation of mineral resources ;
- provisions for expenses to be spread over several years ;
- applied research costs ;
- implementation of the component-based approach ;
- dismantling, removal and site restoration costs;
- lease contracts ;
- provisions for deferred charges ;
- pension and other post-retirement benefit obligations ;
- multi-year contracts ;
- public service concession contracts.
In addition, the pool of technical expertise set up by OHADA's permanent secretariat recommends the following treatments for the opening balance sheet at 1 January.er january 2018:
- only the balance sheet will be pro-forma for the purposes of 2018 opening balances. Thus, for the 2018 financial statements, no figures will be entered in the N-1 column of the income statement and cash flow statement;
- The Annual General Meeting does not vote on the opening balance sheet, known as the pro forma balance sheet, but approves the year-end financial statements;
- in view of the SYSCOHADA revision, the management bodies and the statutory auditor, if any, will mention the possible impact of the change in regulations in their report on the 2018 financial statements;
- there is no need to file an amending tax return for the 2017 financial year with the tax authorities, as the opening balance sheet does not change the result.
In short, we strongly recommend that companies take the necessary steps, if necessary with the help of outside expertise, to comply with the new regulations within the required timeframe.
