Entities can present two financial statements: Murerekwa
KRESTON Zimbabwe Financial Reporting Advisory partner Tinashe Murerekwa says entities should present two sets of financial statements to comply with new central bank regulations that all organisations should conduct financial reporting in ZiG.
In the 2025 Monetary Policy Statement released last month, the Reserve Bank of Zimbabwe (RBZ) mandated that all entities adopt ZiG as a common presentation currency for reporting purposes, including for their 2024 audited financial statements.
The order came as despite being listed on the Zimbabwe Stock Exchange where ZiG is traded, an increasing number of companies were abandoning ZiG financial reporting opting for the greenback instead.
Advertisements
After the policy pronouncement, the Public Accountants and Auditors Board then published a technical paper to guide the market.
In his write-up on the technical paper’s key takeaways, Murerekwa said: “Financial Statements can be prepared as general purpose financial statements (GPFS) and special purpose financial statements (SPFS).
“The GPFS are the ones mandated to be prepared in accordance to IFRS [International Financial Reporting Standards] and are meant for primary users which are investors, potential investors and providers of finance while SPFS are meant for use by secondary users such as government, regulators etc and this can elect to use IFRS or any other national guidance.”
Murerekwa said entities should comply with the RBZ directive and translate the accounts prepared in the functional currency into ZiG at official exchange rates following International Accounting Standards (IAS) 21 rules.
This rule specifies how entities account for foreign currency transactions and operations in their financial statements, including how to translate them into a presentation currency and uses spot exchange rates to record these transactions.
“Entities shall prepare two sets of financial statements being the GPFS and the SPFS. Auditors shall also issue two opinions for their clients, one which is for GPFS and the other for the SPFS which are required by regulatory authorities,” Murerekwa added.
According to the Kreston Zimbabwe official, the technical paper is meant to guide entities who prepared annual financial statements under a functional currency that is not ZiG.
Murerekwa said what might be needed was clarification on whether entities, not specifically mentioned e.g. Victoria Falls Stock Exchange, those under Zimbabwe Tourism Authority or in the private sector, should also observe presenting their accounts in ZiG.
“The functional currency is defined as the currency of the primary economic environment in which an entity operates, simplified it’s the currency dominating transactions in an entity from revenue, expenses (operating and capital) and sourcing of finance for the business,” Murerekwa said.
“It is something observable and factual and Zimbabwe entities usually have a ZiG, USD or ZAR [South African rand] functional currency. The presentation currency on the other hand is the currency in which an entity presents its financial statements.”-newsda
