Eye on Reporting

April 2014

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Welcome to the April edition of Eye on Reporting.

For organisations considering whether there are potential benefits in early-adopting the new hedge accounting requirements, our latest edition of Applying IFRS will be a useful resource. In this edition we explore the new hedge accounting requirements in detail, focusing on the transactions now eligible for hedge accounting and provide illustrative examples.

This month we also highlight our updated suite of IFRS Core Tools, which is now available. These tools provide a number of building blocks to help you keep up with the changing landscape of IFRS, applicable for June 2014 year ends.

If you would like any further information on any of these topics or the topics below, please get in touch with our Financial Accounting Advisory Services Team.

    To find out more about the services we offer in this area please contact EY's Financial Accounting Advisory Services Team

     
     

    Kimberley Crook

    Partner, Auckland

    +64 274 899 535

    Graeme Bennett

    Partner, Auckland

    +64 274 899 943

    David Pacey

    Executive Director, Auckland

    +64 212 425 716

    Lara Truman

    Executive Director, Wellington

    +64 274 899 896

    David Bassett

    Manager, Auckland

    +64 274 899 883

    Kind regards
    Kimberley Crook and Graeme Bennett
    Financial Accounting Advisory Services


    Hot topics

    • Applying IFRS: Hedge accounting under IFRS 9 (2013)
      This issue of Applying IFRS explores the new hedge accounting model in IFRS 9 (2013) Financial Instruments. The new model aims to provide a better link between an entity's risk management strategy, the rationale for hedging and the impact of hedging on the entity’s financial statements. In this publication, we take a closer look at the new requirements of the standard, consider some of the potential benefits for reporting entities and also explore some of the challenges posed by the new IFRS 9 (2013).

      We expect the insights in this publication to be particularly relevant for accountants, treasurers and all who are involved in hedging activities in both financial and non-financial services entities..

    • For-Profit Accounting Standards issued: Statutory Funds and Regulatory Deferral Accounts
      In April 2014, the New Zealand Accounting Standards Board (NZASB) issued:
      • Statutory Funds (Amendments to Appendix C of NZ IFRS 4)
        The amendments to Appendix C of NZ IFRS 4 require disclosure of information about solvency margins for each life fund of life insurance entities in New Zealand. These amendments have been issued in order to align with the new regulatory environment, as well as the equivalent Australian Accounting Standard - AASB 1038 Life Insurance Contracts. The Amendments are effective for Tier 1 and Tier 2 for-profit entities from 1 July 2014.
      • NZ IFRS 14 Regulatory Deferral Accounts
        This Standard permits a first-time adopter within its scope to continue to account for regulatory deferral account balances in its first NZ IFRS financial statements in accordance with its previous GAAP when it adopts NZ IFRS. However, NZ IFRS 14 introduces limited changes to some previous GAAP accounting practices for regulatory deferral account balances, which are primarily related to the presentation of these accounts. NZ IFRS 14 applies to Tier 1 and Tier 2 for-profit entities that are within the scope of, and elect to apply, the standard. For these entities, the standard is effective from 1 January 2016 and earlier application is permitted.
         
      The Standards can be found on the XRB website.

    • IFRS Core Tools
      Our latest suite of IFRS Core Tools consists of a number of practical building blocks that can help you to keep up with the changing landscape of IFRS:
      • IFRS Update: This publication is updated twice each year (as of 31 March and 30 September) and summarises the new standards and interpretations that apply to current reporting periods, as well as issued standards that are effective in future periods.
      • Good Group (International) Limited: Our set of illustrative interim and annual financial statements incorporates the applicable presentation and disclosure requirements, which are referenced throughout.
      • International GAAP Disclosure Checklist: Our publication captures the current disclosure requirements, as well as disclosures that are permitted to be adopted early, to help you comply with IFRS in your interim and year-end IFRS financial statements.

      These tools enable you to quickly identify which of the changes are likely to affect your company. Gaining an initial understanding of the standards will help you to determine those that will require a more detailed assessment. Your EY team is available to advise you, as needed.

      Note that these documents relate to ‘pure’ IFRS and therefore do not include additional New Zealand material.
       

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    Industry in focus

    Public Sector

    • IPSAS Outlook February/March 2014 issue
      The latest issue of IPSAS Outlook focuses on the state of International Public Sector Accounting Standards (IPSAS) adoption in Africa and includes interviews with IPSAS members in Africa, who share their views on pertinent issues and their potential impact for the public sector.

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    On the horizon

    Below are recent EDs which are currently open for comment to the NZASB, IASB and/or International Public Sector Accounting Standards Board (IPSASB). Please refer to the current exposure draft section on the XRB website for more details (www.xrb.govt.nz).
      

     

    Standard/Exposure Draft
    Comments due to NZASB by
    Comments due to IASB by
    Comments due to IPSASB by
     IASB ED/2014/1 Disclosure Initiative (Proposed amendments to IAS 1)
    28 June 2014
    23 July 2014 
     
    Exposure Draft ED NZASB 2014-1 Proposed Disclosure Concessions for Tier 2 For-profit Entities: Hedge Accounting
    2 May 2014
       
    ED NZASB 2013-5 Enhancements to the PBE Standards for Not-for-Profit Entities
    2 May 2014
       
    RFI Post-implementation Review: IFRS 3 Business Combinations
    2 May 2014
    30 May 2014  
    IPSASB Exposure Draft 54 Recommended Practice Guideline on Reporting Service Performance Information 24 April 2014   31 May 2014
    International Public Sector Accounting Standards Board Strategy Consultation 27 June 2014 31 July 2014  

     

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    Events and Webcasts

    • Click here to access a summary of all upcoming webcasts. If you missed any of the recent global webcasts you can now watch them here.

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    Contacts

     For more information on any of the points raised in this newsletter, please contact a member of EY’s Financial Accounting Advisory Services Team.

    To find out more about the services we offer in this area please contact EY's Financial Accounting Advisory Services Team
     

    Kimberley Crook

    Partner, Auckland

    +64 274 899 535

    Graeme Bennett

    Partner, Auckland

    +64 274 899 943

    David Pacey

    Executive Director, Auckland

    +64 212 425 716

    Lara Truman

    Executive Director, Wellington

    +64 274 899 896

    David Bassett

    Manager, Auckland

    +64 274 899 883

     

      


    The information contained in this newsletter does not constitute advice and should not be relied upon as such.  Professional advice should be sought prior to action being taken on any of the information.