Defining Capital Expenditure (CAPEX)

various notes of south african currencyCapital Expenditure (CAPEX) Capital expenditure, or CapEx, are funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. It is often used to undertake new projects or investments by the firm.

This type of outlay is also made by companies to maintain or increase the scope of their operations. These expenditures can include everything from repairing a roof to building, to purchasing a piece of equipment or building a brand-new factory. (more…)

Understanding Foreign Exchange

various world currency notesA foreign currency transaction should be recorded initially at the rate of exchange at the date of the transaction (use of averages is permitted if they are a reasonable approximation of actual).

At each subsequent balance sheet date, foreign currency monetary amounts should be reported using the closing rate non-monetary items, carried at historical cost should be reported using the exchange rate at the date of the transaction. Non-monetary items carried at fair value should be reported at the rate that existed when the fair values were determined. (more…)

Forecasts of Future Results

a hand holding a phone over a stack of papers and a penForecasting in business is the practice of predicting a company’s financial results at certain points in the future, based on certain assumptions and estimates as well as past performance. At we PATC, we understand that whether the forecasting method is simple or sophisticated, the objective is to enable the company to take certain actions in the present that will position it well in the future. Companies should make it a regular practice to compare actual results to projections. This will give subsequent forecasting the benefit of experience. (more…)


a brown wallet with three credit cards insideFinancing is the act of providing funds for business activities, making purchases or investing. Financial institutions and banks are in the business of financing as they provide capital to businesses, consumers and investors to help them achieve their goals. PATC is here to help you understand business financing, keep reading the blog as we explore your options. (more…)

Catching Up With PATC’s Owner & Tax Expert: Gavin Bacon

As you may well know,  in recognition of Gavin’s vast experience and Tax Degree, The Office of the Registrar for the Republic of South Africa appointed Gavin in 2017 as a Commercial Member of the Tax Court for a period of five years – an appointment Gavin was honored to accept.

In an effort to keep up-to-date with the needs of the Tax Court, Gavin attends Tax Court meetings to re-establish his membership, ongoing support and commitment to the Tax Court, with the same dedication he has brought to the industry for the past 3 decades – and counting! He by no means ‘works for the other team’ instead utilising his founded knowledge to better serve the community and his clients. (more…)

Foreign Currency Transactions

A foreign-currency transaction is one that requires settlement, either payment or receipt, in a foreign currency. When the exchange rate changes between the original purchase or sale transaction date and the settlement date, there is a gain or loss on the exchange. Whoever views the denominated currency (the currency the transaction takes place in) as the foreign currency takes the gain or loss. Companies that make many foreign-currency transactions may buy a forward currency contract to get a guaranteed rate. Businesses with few foreign-currency transactions are more likely to convert currency on the spot, or current, rate.

Individual investors who are considering participating in the foreign currency exchange (or “forex”) market need to understand fully the market and its unique characteristics. Forex trading can be very risky and is not appropriate for all investors. (more…)

Valuation of Shares, Goodwill & Members Interest

a bird’s eye view of a desk with a laptop, a chart, some books and a succulent on itShares:

The valuation date value of shares listed on a foreign recognized exchange that are not listed on the JSE must be determined on the same basis as local shares. However, unlike local shares the market value of the shares is based on the ruling price on the last business day preceding valuation.

The methods of valuation depend on the purpose for which valuation is required. Generally, there are three methods of valuation of shares; (more…)

Requirements in terms of the Companies Act in Respect of Annual Financial Statements

desk with a laptop and calculator in a woman’s handsPrivate or personal liability companies that are required to audited by the Companies Act, 2008 or regulation 28 must file a copy of the latest approved Audited Financial Statements on the date that they file their annual return with the CIPC.

The following private companies are required to have their annual financial statements audited;

  • Any private or personal liability company if, in the ordinary course of its primary activities, it holds assets in a fiduciary capacity for persons who are not related to the company, and the aggregate value of such assets held at any time during the financial year exceeds R5 million;
  • Any private or personal liability company that compiles its financial statements internally (for example, by its financial director or one of the owners) and that has a Public Interest Score (PIS) of 100 or more;
  • Any private or personal liability company that has its financial statements compiled by an independent party (such as an external accountant) and that has a Public Interest Score (PIS) of 350 or more;