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Statutory Instrument 62 of 1996

Companies Financial Statements Regulations 1996

SIs 62/1996, 33/1999.




  1. Title and date of commencement.
  2. Provisions of the Act incorporated.
  3. Compliance with these regulations.
  4. Specific disclosures
  5. General disclosures.
  6. Accounting policies.



  1. Share capital.
  2. Long-term liabilities.
  3. Fixed assets.
  4. Other long-term assets.
  5. Current assets.
  6. Loans to officers, nominees and trustees.
  7. Current liabilities.
  8. Construction contracts.



  1. Preparation of cash flow statement.
  2. Operating activities.
  3. Investing and financing activities.
  4. Cash flows of financial institutions.
  5. Foreign currencies.
  6. Extraordinary items.
  7. Interest and dividends.
  8. Taxes on income.
  9. Acquisitions and disposals.



  1. Specific disclosures.
  2. Earnings per share.



  1. Application of this Part.
  2. Consolidated financial statements.
  3. Holding company’s own financial statements.
  4. Associated companies.



  1. Discontinued operations.
  2. Business combinations.
  3. Capitalisation of borrowing costs.
  4. Contingencies and charges over assets.
  5. Post balance sheet events.
  6. Retirement benefits.
  7. Leases in the financial statements of lessees.
  8. Leases in the financial statements of lessors.
  9. Research and Development.
  10. Government grants.
  11. Foreign currency transactions.
  12. Foreign entities and operations.
  13. Segmental reporting.
  14. Related parties.
  15. Joint ventures.
  16. Jointly controlled operations.
  17. Jointly controlled assets.
  18. Jointly controlled entities.

54A. Offsetting of a financial asset and a financial liability.

54B. Interest, dividends, losses and gains. 54C. Terms, conditions and accounting policies 54D. Interest rate risk. 54E. Credit risk.

54F. Fair value

54G. Financial assets carried at an amount in excess of fair value. 54H. Hedges of anticipated future transactions.



  1. Application of this Part.
  2. Balance sheet.
  3. Income statement.
  4. Items not to be offset.
  5. Contingencies and commitments, off balance sheet items.
  6. Assets and liabilities.
  7. Losses on loans and advances.



  1. Application of this Part.
  2. Compliance with these regulations.

IT is hereby notified that the Minister of Justice, Legal and Parliamentary Affairs has, in terms of section 360 of the Companies Act [Chapter 24:03], made the following regulations:—



1.   Title and date of commencement

  • These regulations may be cited as the Companies (Financial Statements) Regulations, 1996.
  • These regulations shall come into operation on the 1st May, 1996.

2.   Interpretation

(1) In these regulations—

“associated company” means an enterprise in which the investor has significant influence and which is neither a subsidiary nor a joint venture of the investor;

“borrowing costs” means interest costs incurred by an enterprise in connection with the borrowing of funds and includes amortisation of discount or premium arising on the issue of debt securities, amortisation of ancillary costs incurred in connection with the arrangement of borrowing, and foreign currency differences relating to funds to the extent that they are regarded as an adjustment to interest costs;

“cash”, in relation to cash statements, means cash on hand and demand deposits with financial institutions;

“capital reserve” means a reserve not free for distribution and does not include any amount falling within the definition of “provision”;

“cash equivalents”, in relation to cash statements, means short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value; “consolidated financial statement” means a financial statement of a group presented as that of a single enterprise;

“cost method”, in relation to accounting for associated companies, means the method of accounting whereby the investment is recorded at cost;

“control” means the power to govern the financial and operating policies of an economic activity so as to obtain benefits from it;

“current investment” means an investment that is by its nature readily realisable and is intended not to be held for more than one year;

“development” means the translation of research findings or other knowledge into a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services prior to the commencement of commercial production;

“equity instrument” means any contract that evidences a residual interest in the assets of an enterprise after deducting all of its liabilities;

[Definition inserted by s.i. 33 of 1999]

“equity method of accounting for investments” means the method of accounting whereby the investment is initially recorded at cost and adjusted thereafter for the post acquisition change in the investor’s share of the net assets of the investee;

“fair value” means the amount for which an asset could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arms length transaction;

“finance lease” means a lease that transfers substantially all the risks and rewards incident to ownership of an asset; title may or may not be transferred;

“financial asset” means an asset which is— (a)           cash;

  • an equity instrument of another enterprise;
  • a contractual right to receive cash or another financial asset from another enterprise;
  • a contractual right to exchange a financial instrument with another enterprise under conditions which are potentially favourable;

“financial instrument” means any contract which gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise;

[Definition inserted by s.i. 33 of 1999]

“financial liability” means any liability which is a contractual obligation— (a)    to deliver cash or another financial asset to another enterprise; or

(b)   to exchange a financial instrument with another enterprise under conditions that are potentially unfavourable;

[Definition inserted by s.i. 33 of 1999]

“financial statement” includes—

  • balance sheets, income statements or profit and loss accounts, cash flow statements, notes and other statements and explanatory material which are identified as being part of the financial statements; and
  • accounts as defined in section 2, as read with subsection (7) of section 142, of the Act;

“financing activity”, in relation to cash flow statements, means an activity that results in changes in the size and composition of the equity capital and borrowings of the company;

“group” means a holding company and all its subsidiaries;

“investing activity”, in relation to cash flow statements, means the acquisition and disposal of long-term assets and other investments not included in cash equivalents;

“investment” means an asset held by an enterprise for the accretion of wealth through distribution, for capital appreciation, or for other benefits to the investing enterprise;

“long-term investment” means an investment other than a current investment;

“market value” means the amount obtainable from the sale of an investment in an active market;

“marketable” means an active market from which a market value is available;

“minority interest” means that part of the net results of operations and of net assets of a subsidiary attributable to interests which are not owned, directly or indirectly through subsidiaries, by the parent;

“net realisable value” means the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale;

“operating activities”, in relation to cash flow statements, means the principal revenue producing activities of an enterprise, and any other activities which are not investing or financing activities.

“operational lease” means a lease other than a finance lease;

“ordinary share” means an equity instrument that is subordinate to all other classes of equity instrument;

[Definition inserted by s.i. 33 of 1999]

“provision” means any amount written off or retained by way of providing for depreciation, renewals or diminution in value of assets or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy:

Provided that any such amount which, in the opinion of the directors and the auditors, is in excess of that reasonably necessary for the purpose, shall be treated for the purposes of these regulations as a reserve;

“research” means original and planned investigation undertaken with the hope of gaining new scientific or technical knowledge and understanding;

“revenue reserve” means any reserve other than a capital reserve;

“stocks” means assets that are—

  • held for sale in the ordinary course of business; or
  • in the process of production for such sale; or
  • in the form of material or supplies to be consumed in the production process or in the rendering of


“timing differences” means the differences between the taxable income and accounting income for a period that arise because the period in which some items of revenue and expense are included in taxable income does not coincide with the period in which they are included in accounting income; they originate in one period and reverse in one or more subsequent periods.

(2) “Related parties” shall be considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.

  3.   Application

It is not a requirement of these regulations that the numbers, symbols and letters used to identify sections, subsections and paragraphs of the regulations should be used to identify items in the financial statements or annual report of a company.

 4.   Provisions of the Act incorporated

These regulations incorporate sundry provisions of the principal Act dealing with matters which are to be shown in the financial statements or annual report of the company including the provisions of sections 184 and 185 of the Act which deal with director’s salaries, pension and other emoluments, and with loans to directors and other officers respectively.

 5.   Compliance with these regulations

  • Every company shall comply with the provisions of Parts II, III and IV of these regulations and the provisions of Parts V, VI and VII in so far as they are relevant to the affairs of the company:

Provided that if the directors of a private company which is not required to appoint an auditor in terms of subsection (7) of section 150 of the Act are of the opinion that to comply with Part III would be of no value to the members of the company, that company shall not be required to prepare a Cash Flow Statement.

  • Notwithstanding the proviso to subsection (1), where, for any reason, there is non-compliance with the disclosure or accounting requirements of these regulations, the fact of non-compliance and the reason therefor shall be disclosed in the financial statements by way of note.
  • Where it is not clear from the context what accounting treatment is necessary in order to comply with the disclosure requirements, reference should be made to the appropriate Zimbabwe Accounting Standard.
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