IPSASB Proposals for Financial Instruments

These proposals are relevant for Tier 1 and Tier 2 public benefit entities (PBEs)—both not-for-profit and public sector entities.

The International Public Sector Accounting Standards Board (IPSASB) has published for comment ED 62 Financial Instruments (ED 62). The ED is based on IFRS 9 Financial Instruments,with public sector-specific modifications and guidance.

Once the IPSASB issues a financial instruments standard based on IFRS 9, the NZASB would apply its Policy Approach to Developing the Suite of PBE Standards. This has a rebuttable presumption that the NZASB will adopt a new or amended IPSAS, in which case PBE IFRS 9 Financial Instruments would be superseded.


In January 2017, the New Zealand Accounting Standards Board (NZASB) issued PBE IFRS 9 with an effective date of annual periods beginning on or after 1 January 2021.

PBE IFRS 9 was developed and issued by the NZASB as an interim standard in advance of the International Public Sector Accounting Standards Board (IPSASB) developing an international public sector accounting standard IPSAS based on IFRS 9 Financial Instruments.

The NZASB issued PBE IFRS 9 to address concerns that an IPSAS based on IFRS 9 would not be issued before NZ IFRS 9 Financial Instruments became effective, which would result in groups with both for-profit entities and public benefit entities having different accounting requirements for financial instruments.

ED 62 Financial Instruments

The IPSASB has published for comment ED 62 , which is based on IFRS 9. 

ED 62 will replace IPSAS 29 Financial Instruments: Recognition and Measurement. The IPSASB considers that it will improve the requirements in IPSAS 29 by introducing:

  • simplified classification and measurement requirements for financial assets;
  • a forward-looking impairment model; and
  • a flexible hedge accounting model.

ED 62 also includes public sector specific guidance on financial guarantees issued through non-exchange transactions and concessionary loans and examples illustrating how to apply those principles in ED 62 to transactions that are unique to the public sector.

We encourage you to read the Exposure Draft and provide your comments on the proposals. You may also want to read the Basis for Conclusions on PBE IFRS 9 Financial Instruments before responding.

How to comment

You can send your comments in an email or letter and these can be formal or informal.

Comments are due to the NZASB by 13 November 2017 and to the IPSASB by 31 December 2017.

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