NZASB Update #1

This NZASB Update provides you with an overview of the New Zealand Accounting Standards Board’s recent activities, any new standards or interpretations it has issued, as well as other matters of interest.

 

New standards

The NZASB has recently issued the following new accounting standards.

Standard

Effective Date*

PBE FRS 48 Service Performance Reporting

Not-for-profit Public Sector  Tier 1 and 2 logo

This Standard establishes new requirements for public benefit entities (PBEs) to select and present service performance information.  

PBEs within the scope of this Standard will need to provide users with:

  1. sufficient contextual information to understand why the entity exists, what it intends to achieve in broad terms over the medium to long term, and how it goes about this; and
  2. information about what the entity has done during the reporting period in working towards its broader aims and objectives.
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1 Jan 2021

(early application permitted)

 Omnibus Amendments to NZ IFRS

for-profit logo Tier 1 and 2 logo

Amendments have been made to the following for-profit accounting standards.

 

  • NZ IFRS 10 Consolidated Financial Statements and NZ IAS 28 Investments in Associates and Joint Ventures

To require the ultimate New Zealand parent entity to present consolidated financial statements and to apply the equity method in accounting for interests in associates and joint ventures (except where the parent is an investment entity).

 

Effective for reporting periods beginning on or after 1 January 2019, with early adoption permitted.

 

  • NZ IFRS 7 Financial Instruments: Disclosures

To delete most of the paragraphs in Appendix E New Zealand-specific Additional Disclosure Requirements Applicable to NBDTs that are now redundant because of NZ IFRS 9 Financial Instruments.

 

Effective for reporting periods beginning on or after 1 January 2018, with early adoption permitted. 

 

In addition, amendments have been made to some other standards to update terminology and to make editorial corrections. 

 

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Prepayment Features with Negative Compensation (Amendments to NZ IFRS 9)

for-profit logo Tier 1 and 2 logo

This amending standard provides a narrow exception to NZ IFRS 9 Financial Instruments for financial assets that contain prepayment features with negative compensation.

 

Depending on an entity’s business model, some such instruments may now be measured at amortised cost or fair value through other comprehensive income (FVOCI) rather than at fair value through profit or loss.


 1 Jan 2019

(early application permitted)

 * Reporting periods beginning on or after

Recent Exposure Drafts

Before issuing a finalised accounting standard the NZASB and international standard-setting Boards—such as the IASB and IPSASB—issue exposure drafts that seek feedback on proposals from potentially affected constituents.

We are seeking feedback on the following recently-issued exposure drafts (EDs).

ED 63 Social Benefits

Public Sector Tier 1 and 2 logo

The International Public Sector Accounting Standards Board (IPSASB) has issued ED 63 Social Benefits, addressing accounting for the delivery of social benefits, such as retirement, unemployment, and disability, aiming to improve consistency, transparency, and reporting by public sector entities of social benefit schemes.

The NZASB is seeking comments from constituents by 23 February 2018. Comments are due to the IPSASB by 31 March 2018.

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NZASB ED 2017-3 Proposed Amendments to FRS-42 Prospective Financial Statements

for-profit logo Tier 1 and 2 logo

The proposals are relevant for Tier 1 and Tier 2 for-profit entities.

The NZASB has issued proposed amendments to FRS-42.

These proposed amendments seek to limit the scope of FRS-42 to those entities that have a legislative requirement to prepare general purpose prospective financial statements in accordance with GAAP.

The NZASB is seeking comments from constituents by 28 February 2018

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Upcoming events

NZASB November additional Board meeting

24 November 2017, Wellington

The Board intends to discuss its submission to the IPSASB on its Consultation Paper Revenue and non-exchange transactions.

NZASB December Board meeting

14 December 2017, Wellington

The Board intends to discuss a range of topics affecting both PBEs and for-profit entities.

Agenda items include, IPSASB ED 62 Financial Instruments, IPSASB ED 63 Social Benefits, Limited scope amendments to Tier 3 and Tier 4 PBE Standards and Proposed RDR concessions for NZ IFRS 16 Leases.


In case you missed it...

Better Communication in Financial Reporting

The IFRS Foundation has published a case study report showing how companies from different parts of the world have improved communication in their IFRS financial statements. The report includes examples from New Zealand’s Fonterra Co-operative Group Limited.

This report may be helpful to those considering or that are in the process of making improvements to their financial statements.

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New Zealand appointment to the IFRS Advisory Council

Ken Warren from New Zealand Treasury has been appointed to the IFRS Advisory Council for a three‑year term with effect from 1 January 2018. Ken has been appointed with an affiliation to the XRB, and represents public sector preparer interests on the Advisory Council.

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This NZASB Update is intended to provide subscribers with a summary of the recent activities of the New Zealand Accounting Standards Board’s (NZASB). Links to websites are correct at the time of publication. Subscribers should not rely on this newsletter as a definitive publication of updates. The External Reporting Board and its sub-Board the NZASB do not guarantee, and accept no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency, timeliness or completeness of this newsletter. The information contained in this newsletter does not constitute advice and should not be relied upon as such.