| A |
Accounting for convertible debt instruments |
| |
Under SA GAAP, on the issue of convertible debt instruments,
the issuer of the financial instrument is required to classify
the instrument’s component parts as a liability or as
equity in accordance with the substance of the contractual arrangement.
The fair value of the conversion option is determined accordingly
and is recognized and presented in shareholders’equity.
The obligation to make future payments of principal and interest
to noteholders is calculated by discounting the stream of future
payments at the prevailing market rate for a similar liability
that does not have an associated equity component as a long-term
liability on the amortized cost basis until extinguished on
conversion or maturity. Under US GAAP no separate value is attributed
to the equity component and consequently the total face of the
loan notes is recognized as debt. The interest rate is calculated
using the coupon rate and any premium/discount on redemption.
|
| B |
Accounting for financial instruments – derivatives |
| |
Under SA GAAP, AC133 was adopted with effect from July 1,
2002, whereby certain financial instruments are recorded at
fair value. This is consistent with US GAAP. |
| C |
Accounting for listed investments |
| |
Under SA GAAP, DRD has elected that listed investments are
classified as available for sale investments and are recorded
at fair value with unrealized gains and losses included in earnings
for the relevant period. Under US GAAP, listed investments are
carried at fair value with unrealized gains and losses reflected
as a component of stock stockholders’ equity. |
| D |
Accounting for business combinations |
| |
Under SA GAAP the fair value of the purchase consideration
given in a business combination is determined at the date of
acquisition. Under US GAAP the fair value is determined in accordance
with paragraph 74 of APB opinion 16, such that the market prices
for a reasonable period before and after the date on which the
terms of the acquisition are agreed to and announced are considered
in determining the fair value of the securities issued. |
| E |
Stock based compensation costs |
| |
Under US GAAP, the cost of compensatory plans are recognized
as an expense over the periods in which the employee performs
the related services. SA GAAP does not require the recognition
and measurement of stock based compensation benefits. |
