NZASB Meeting 6 October 2017

Event Date 06 October

Date And Time

Location:
Level 7
50 Manners Street
Wellington 6011

AND

Level 12
55 Shortland Street
Auckland 1011

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Here is a summary of the main matters considered.

Accounting for Revenue and Non-Exchange Expenses

The NZASB considered chapters 1–5 of the International Public Sector Accounting Standards Board (IPSASB) Consultation Paper Accounting for Revenue and Non-Exchange Expenses (the CP). The Board provided feedback on preliminary views 1–4 and specific matters for comment 1–6 on its draft comment letter of the CP.

The Board agreed the key determinant of revenue recognition in the public sector and not-for-profit sector under the proposed framework should be the classification of revenue transactions with performance obligations or those without performance obligations[1] rather than the current exchange or non-exchange classification.

The Board discussed the wide spectrum of revenue transactions in the public sector and not-for-profit sector and agreed revenue transactions with performance obligations should be accounted for using the approach described in the CP as the Public Sector Performance Obligation Approach, which is based on IFRS 15 Revenue from Contracts with Customers but adapted for the public sector.

The Board noted revenue transactions with time requirements[2] or stipulations over use (but no performance obligations) could be accounted for using the presentation option or other comprehensive revenue and expense with recycling option proposed in the CP.

At the next meeting, the Board will discuss the non-exchange expenses recognition approaches proposed in the CP.

> Access a recording of our webinar

Comments for the CP are due to the NZASB by 22 November 2017 and to the IPSASB by 15 January 2018.

Next Meeting

1 November 2017 in Wellington


[1] Performance obligations as defined by IFRS 15, being a promise to transfer goods or services to a third party.

[2]  A time requirement is a provision in an agreement indicating the resource provider’s intention that the resources are to be used by the resource recipient in a specific time period or periods.