Eye on Reporting
Monthly Financial Reporting newsletter
Welcome to the June edition of Eye on Reporting.
The International Accounting Standards Board (IASB) has issued an exposure draft on its decision to propose a one-year deferral of the effective date for its new revenue standard. Our IFRS Developments publication provides a summary of the proposal.
We also highlight our latest publications on the IASB’s new revenue standard. Our latest IFRS Developments publication examines the proposed amendments to IFRS 15 in relation to principal versus agent considerations. We also discuss the potential implications of IFRS 15 for retail and consumer products entities.
This month we provide information on:
- Our latest Applying IFRS publication on the classification requirements of new IFRS 9
- Our webcast on impacts of IFRS 9 on non-financial institutions
- Important changes introduced by the Companies Amendment Act 2014
Kimberley Crook and Graeme Bennett
Financial Accounting Advisory Services
Eye on Reporting headlines:
- Hot topics
- Other IFRS news and other updates
- Industry in focus
- On the horizon
- Events and webcasts
The International Accounting Standards Board (IASB) has issued an exposure draft that proposes a one-year deferral of the effective date of its new revenue recognition standard, IFRS 15 Revenue from Contracts with Customers. Comments are due by 3 July 2015. This issue of IFRS Developments provides a summary of the proposal.
The IASB will propose amendments to the application guidance and certain illustrative examples in its new revenue standard in relation to principal versus agent considerations. This issue of IFRS Developments provides a summary of discussions at the May 2015 board meeting.
This edition of Applying IFRS considers the potential implications of the new revenue recognition standard for retail and consumer products entities. This publication supplements our Applying IFRS: A closer look at the new revenue recognition standard (June 2014), and should be read in conjunction with it.
This edition of Applying IFRS addresses the classification requirements of IFRS 9 (2014) Financial Instruments. In July 2014, the IASB issued the final version of IFRS 9, bringing together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39 and all previous versions of IFRS 9.
Companies Amendment Act 2014 – updates required by all New Zealand companies
As of 1 May 2015 new registration requirements will be introduced by the Companies Amendment Act 2014 (the Act). Companies incorporated before 1 May 2015 have a 180 day transition period to comply.
Important changes introduced by the Act include:
- All New Zealand incorporated companies to have at least one director who lives in New Zealand or Australia (the Australian director must also be a director of an Australian incorporated company)
- All directors to provide their place and date of birth
- All companies to supply their ultimate holding company details (if applicable).
Read more about changes here.
Other IFRS news and other updates
Reporting is our international magazine exploring the reporting and governance issues on the minds of the executive and boards of our clients. Reporting is written for CFOs, audit committee and board members and senior finance professionals of leading cross-border companies reporting issues that companies face.
With rapid changes in the world of business, the competencies required for a successful career in assurance are also evolving. Finance skills, sound judgment and a healthy dose of professional skepticism are no longer enough. Issue 9 of Reporting examines this development in assurance, as well as includes exclusive interviews and insightful analysis.
This edition of Applying IFRS summarises the issues on which the Transition Resource Group (TRG) generally agreed at meetings in 2014 and 2015. While the unofficial views of the TRG are non-authoritative, they represent the latest thinking on each topic.
The IASB has proposed revisions to its Conceptual Framework that aim to provide an updated and more complete set of concepts for standard-setting and guidance for preparers in developing accounting policies, and assistance to others in their efforts to understand and interpret the standards. This edition of Applying IFRS explains what you need to know.
This edition of IFRS developments covers the background of the IASB’s project to address accounting for dynamic risk management and the Board’s discussions during its May 2015 meeting around the next steps of the project.
Industry in focus
At its May meeting, IASB continued its discussions on participating contracts. Members provided feedback on several key topics related to contracts with participation features; this feedback will shape the further development of the proposals. Our Insurance Accounting Alert tells you what you need to know about the IASB’s May 2015 discussions.
Join us for this webcast on 15 June as our panelists explore the revenue recognition implementation issues for pharma, biotech and medtech companies. The discussion will include:
- An update on the standard and potential changes being considered by the Transition Resource Group
- Practical application issues specific for life sciences companies
- Implementation challenges including project set up, contract selection and use of tools.
The webcast will be hosted by Scott Bruns, EY Global Life Sciences Assurance Leader. Please register here.
On the horizon
Below are recent proposals that are currently open for comment to the NZASB, IASB and/or 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
12 May 2015
10 June 2015
3 July 2015
Events and webcasts
The IASB issued the final version of IFRS 9 Financial Instruments. The standard is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Impacts of the new standard will be varied, and may include significant development of systems and processes. It is critical to plan an initial assessment of the likely impacts of IFRS 9 in order to manage successful transition and implementation.
During this webcast, our panel will discuss the key concerns of IFRS 9 and provide insights on:
- The background to the IFRS 9 project;
- Key areas of impact for non-financial institutions;
- The new classification model;
- The new expected credit loss model, and how it applies to non-financial institutions;
- New criteria for hedge accounting, with practical examples.
Please click here to register.
The new revenue recognition standard: a closer look - A webcast series for IFRS preparers: session 1, 2 and 3 (Replay)
Register for three sessions of our webcast - The new revenue recognition standard: a closer look. The webcast series will include a detailed discussion and a variety of examples for each step of the new revenue recognition model by our panel of subject-matter professionals.
The first webcast in this series will cover the requirements of Step 1 and Step 2 of the new revenue recognition model, as well as the application guidance on warranties. Our panel will also discuss the transition requirements of the new standard. Please click here to watch.
The second webcast will cover the requirements of Step 3 and Step 4, as well as the guidance on capitalisation of costs to obtain and fulfil contract. Please click here to watch.
The third webcast will cover the requirements of Step 5, as well as the application guidance on licenses of intellectual property. Our panel will also discuss presentation and disclosure requirements, highlighting areas that may require significant amounts of data and/or judgments by management. Please click here to watch.
Archived recordings of all our previous webcasts are available here.
For more information on any of the points raised in this newsletter, please contact a member of 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|
|Alex Knyazev – Senior Manager, Auckland||+64 218 53 152|
|David Bassett – Senior 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.