How to Calculate Public Interest Score for CIPC
As mandated by the Companies Act of 2008, businesses in South Africa must calculate their PI Score and submit it along with their financial statements to the Companies and Intellectual Properties Commission (CIPC).
But what is a PI Score? The Public Interest Score (PI Score) indicates the degree of public interest in your company. It determines whether your company requires an audit or an independent review of the financial statements and the reporting standards to be applied. In addition, it helps companies with a high PI score determine their need to appoint a Social and Ethics Committee.
The primary issue to address is – How to calculate PI score? Let’s find out.
Calculating the PI Score for Your Company
A company’s PI Score is calculated with the help of a point system. Various financial parameters are given points that are added to find the overall PI score of the company. These structural and financial parameters include:-
Number of Employees
The first parameter used in calculating the PI Score is the number of employees in a company. However, if this number varies every year, the average number of employees is taken into consideration. After arriving at the average number of employees in the company, one point is allotted per employee.
Third-Party Liabilities
At the financial year-end, the total amount of third-party liabilities is calculated. After which, one point is assigned for every R1 million (or portion thereof) in third-party liabilities of the company.
Turnover
A company’s total turnover is the next parameter for calculating the total PI Score. One point is allotted for every R1 million (or portion thereof) in a company’s total turnover during the financial year.
Number of Stakeholders
At the end of the financial year, companies calculate the total number of stakeholders. For a profit company, these can be the individuals who have a direct or indirect beneficial interest in the company’s issued securities. On the other hand, for a non-profit company, these individuals can be members of the company. One point is assigned per individual having a beneficial interest in the company.
The points mentioned above are added to arrive at the total PI Score of the company during the 12 months making up a financial year. The higher the PI Score, the higher the requirement for regulating financial statements through review and audit.
These requirements are also dependent on various other factors. For instance, a non-owner-managed company with a PI Score of 100-349, having an internal FS compilation, must be audited. However, a non-owner-managed company with an independent compilation can review its FS independently. Similarly, with a PI Score of 350, it becomes mandatory for private businesses to get audited.
All about Public Intrest Score
Time to Seek Expert Guidance
The PI Score acts as an indicator of a company’s public interest. Calculating the PI Score is essential as it identifies the reporting regulations and requirements for a company. Therefore, it becomes crucial to calculate this score with sound judgment and knowledge. Enter DataTracks…
With an experience of 16+ years and 19,900+ clients, DataTracks assures quality and reliability in its iXBRL filing solutions. To learn more about calculating the PI Score for your company, seek professional guidance by speaking to a DataTracks expert at @+27-10-446-9061 or visit the website https://www.datatracks.com/za/pis-calculator/.