What Are Technical Accounting and Taxation Memos?
Technical memos are detailed written documents that provide authoritative guidance, analysis and recommendations on complex accounting and tax matters. These memos are often used to support management decisions, satisfy auditor or regulator requirements, and document the rationale behind key financial or tax positions.
They are especially critical when dealing with grey areas, judgment calls, new standards, unusual transactions, or when preparing for audits, reviews, mergers, restructures, or SARS engagement.
- What Our Memos Typically Include
Issue Identification and Context Setting We define the technical issue at hand, describe the relevant transaction or situation, and frame the background to ensure a clear understanding of why the matter requires a formal memo.
We cite and analyse the relevant accounting standards (e.g. IFRS, IFRS for SMEs) or tax legislation (e.g. Income Tax Act, VAT Act, SARS practice notes) that apply to the situation.
We provide a deep, professional interpretation of the applicable guidance, supported by:
• References to legislation or reporting frameworks
• Interpretations from regulators or professional bodies
• Relevant case law, SARS rulings or international benchmarks
We state the recommended accounting treatment or tax position, explaining the reasoning and how it aligns with the relevant framework. Where appropriate, we include alternative treatments and justify the selected approach.
Where necessary, we quantify or outline the financial statement, tax or operational impact of the chosen treatment. This can include:
• Adjustments to financials
• Disclosure requirements
• SARS submission or compliance implications
The memo includes appendices, source references, calculations, or supporting documentation to strengthen its defensibility.
- Key Use Cases for Accounting Memos
Examples of When You May Need a Technical Memo
Accounting Memos
• Revenue recognition on complex or multi-element contracts
• Lease classifications under IFRS 16
• Asset impairment or fair value assessments
• Business combinations and goodwill treatment
• Deferred tax asset recognition
• Share-based payments
Taxation Memos
• Capital gains tax treatment on disposals
• VAT implications of cross-border transactions
• Employee tax (PAYE) on fringe benefits
• Interpretation of tax residency rules
• Withholding tax on royalties or interest
• SARS objection or dispute documentation
Benefits of Professional Technical Memos
Ensures compliance with complex or evolving regulations
• Strengthens positions in audits, reviews or disputes
• Documents professional judgment for governance and defence
• Supports accurate and consistent financial reporting
• Enhances credibility with external auditors, SARS and investors
