A comparative analysis of road infrastructure accounting in South Africa.

Abstract

The South African Government has spent R86.4 billion on transport and logistics infrastructure in the 2022/2023 financial year (Treasury, 2024). This makes up 36.18% of the country's total infrastructure spending, highlighting the significance of these assets. Reliable and publicly accessible accounting information about infrastructure assets serves as a valuable resource when evaluating the magnitude and nature of investments in such assets (Ehalaiye et al., 2021). Currently, the accounting for road infrastructure assets is regulated by the Generally Accepted Accounting Practice (GRAP) standard applicable to property, plant, and equipment. The research aims to assess the influence of the current accounting practices adopted by the three road authorities in South Africa on the uniformity of financial reporting. This research employed mixed method approach with content analysis used to analyse the current accounting practices adopted by the three road authorities in South Africa in accounting for road infrastructure assets in their annual financial statements. A self-constructed disclosure index, informed by the reviewed literature, was utilised to collect data. Information gathered was analysed by applying framework analysis, carried out manually by documenting information collected from the annual report and identifying common themes. The results revealed that the entities apply different accounting policies for road infrastructure assets. The South African National Roads Agency Limited demonstrates an application most aligned with the proposals outlined in the reviewed literature, offering an opportunity for the other two entities to adopt similar practices. The results of this research will contribute to a better understanding and knowledge of infrastructure accounting. Furthermore, the results will assist authorities in recognising the need for guidelines and in developing principles to guide the accounting for infrastructure assets, enabling stakeholders to better interpret the data presented in financial reports.