National Treasury Issues Modified Cash Standard for 2025/26 and 2026/27

Posted 26 June 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: In terms of the Public Finance Management Act, No. 1 of 1999 (PFMA), the Office of the Accountant-General (OAG) has issued the updated Modified Cash Standard (MCS) for the 2025/26 and 2026/27 financial periods.

The PFMA requires government departments to prepare financial statements for each financial year in accordance with generally recognised accounting practice. Treasury Regulations further mandate that the accounting officer of a department must ensure annual financial statements are prepared on a modified cash basis following the formats prescribed by the National Treasury. The MCS sets out the principles for the recognition, recording, measurement, presentation, and disclosure of information required in these formats.

The Standard is structured into separate chapters covering assets, liabilities, revenue, and expenditure. Depending on the complexity of the topic, multiple chapters may exist for specific items. Departments claiming compliance with the modified cash basis of accounting are required to adhere fully to the principles and disclosure requirements contained within the Standard to achieve fair presentation and maintain compliance with the PFMA and its associated regulations.

Effective Dates and Documentation

The National Treasury has provided two distinct versions of the Standard to facilitate forward planning and compliance:

  • The 180-page Modified Cash Standard for the 2025/26 financial year is effective from 1 April 2025.
  • The 233-page Modified Cash Standard for the 2026/27 financial year is effective from 1 April 2026.

Click here to download the Modified Cash Standard for 2025/26.

Click here to download the Modified Cash Standard for 2026/27.

What this means for you, your business, or your clients

  • For yourself: No direct individual obligations; impact is channelled through professional responsibilities to ensure public sector financial statements meet the specific recognition and measurement criteria set out in the updated chapters.
  • For your business: Audit firms and consultancies providing services to the public sector must update their 2025 and 2026 engagement templates and compliance checklists to reflect the specific disclosure requirements of the 180-page and 233-page standards respectively.
  • For your clients: Government department clients must ensure full adherence to the principles, presentation, and disclosure requirements of the MCS to achieve fair presentation and avoid audit findings related to non-compliance with Treasury Regulations.

Originally published at https://accountingacademy.co.za/news/read/national-treasury-modified-cash-standard-for-2025-26-and-2026-27

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