PurposeThis paper provides a critical analysis of the South African government's response to the COVID-19 crisis and its effect on state finances and budgets.Design/methodology/approachThe paper critically analyses publicly available data.FindingsThe South African government's initial health response was praised by the international community, given the early lockdown and extensive testing regime. The lockdown devastated an already precarious economy, which led to negative social consequences. The initial lockdown delayed the epidemic, but subsequently, the infection rate climbed, requiring new restrictions, suggesting further economic disruption. The government has had to increase its borrowings, while the future tax take is forecast to be significantly reduced, a combination which will lead to a severely constrained public purse for many years to come. This will limit the government's ability to address the basic social needs that predated the COVID-19 crisis.Originality/valueThis is one of the first academic papers to critically assess the effect of the South African government's response to the COVID-19 crisis on state finances and budgets.

This paper investigates the current extent of social-, environmental-and economic-(SEE) related strategy disclosure of companies listed in the financial services sector of the Johannesburg Stock Exchange. It uses signalling and legitimacy theory to analyse the findings from a developed SEE strategy-related disclosure checklist.The paper finds social and environmental strategy-related disclosure is still secondary to economic strategy-related disclosures. This may be due to persistent focus on providers of financial capital and the need to perform financially. Further, the subsector's business model and how closely the subsector interacts with their customers is seen as a driver of social and environmental strategy-related disclosure to maintain their legitimacy and to reduce information asymmetry, reduce cost of capital and assure investors that these factors are being appropriately managed by the entity.Following from above, the banking, insurance and real estate subsectors presented the most strategy-related disclosure. This was linked to their high public accountability and daily interaction with customers, necessitating the need to manage their legitimacy and address adverse selection. The paper also proposes some areas for future research to understand the potential obstacles to incorporating social and environmental concerns into strategy and related disclosures.

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PurposeThe objective of this research is to explore the challenges being encountered when applying and implementing fair value accounting requirements, focusing specifically on the determination of fair value per International Financial Reporting Standards (IFRS) 13: Fair value measurement (IFRS 13) in the South African capital market.Design/methodology/approachData are collected from 20 detailed interviews, primarily with preparers and interpretively analysed to identify how individuals internalise the requirements of IFRS 13 and the challenges associated with its application. The researchers focus specifically on South Africa because of its status as a developing economy and, at the same time, its extensive experience in applying IFRS.FindingsSouth African preparers appear reluctant to change from a conventional cost-based measurement approach to one grounded in fair value. Primary concerns include the perceived usefulness of fair value accounting and its conceptual appropriateness, given its perceived de-emphasis of the traditional stewardship role of financial reporting. Related challenges to the application of IFRS 13 include concerns about the cost of determining fair value; the inherent subjectivity of fair value measures and the practical difficulty of calculating fair values when markets are not efficient or where business environments are complex and dynamic where Level 1 inputs are not widely available for all assets and liabilities. These challenges encourage preparers to choose accounting policies, which minimise the use of fair value or apply the provisions of IFRS 13 legalistically.Research limitations/implicationsData are collected from a group of respondents from a single developing economy. Additional research on the application of IFRS 13 in other developing markets will be required to conclude on the relevance of economic, cultural and social factors for the understanding and implementation of new accounting standards by practitioners.Practical implicationsStandard setters and regulators cannot assume that new accounting standards will be interpreted and applied as intended. Even when compliance with IFRS is mandatory, preparers have considerable discretion when it comes to operationalising accounting prescriptions. Unless the challenges raised by preparers are addressed, misapplication of IFRS is likely to continue.Originality/valueThe research makes an important empirical and practical contribution by providing primary evidence on the operationalisation of IFRS 13 in a novel setting. It complements earlier research which has focused primarily on the conceptual/theoretical dimension and on American and European perspectives.