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Eye on Reporting - July 2013

July 2013

Welcome to the July edition of Eye on Reporting.

As highlighted last month, the New Zealand Accounting Standards Board (NZASB) and its parent body, the External Reporting Board (XRB) have issued a package of new accounting standards for public benefit entities (PBEs).  The new PBE Standards will apply to large and medium-sized public sector PBEs (Tiers 1 and 2) and are primarily based on International Public Sector Accounting Standards, with some modifications for application in New Zealand. In our publication Changing tack - A new set of accounting standards for public benefit entities  we provide a summary of the financial reporting requirements for PBEs and highlight the key differences between the PBE standards and current NZ IFRS. We also outline the next steps PBEs should be considering, including assessing whether or not your organisation meets the definition of a PBE.

This month we also bring you our quarterly New Accounting Standards and Interpretations publications for entities with a 30 June 2013 balance date. We have two separate publications, one for for-profit entities and another for public benefit entities, to address differences in the accounting standards framework applying to for-profit entities and public benefit entities.

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 9 300 7094

David Pacey

Executive Director, Auckland

+64 212 425 716

Ravi Kumar

Senior Manager, Auckland

+64 212 214 717

Jude Doliente

Senior Manager, Auckland

+64 212 417 481

David Bassett

Manager, Auckland

+64 274 899 883

Kind regards
Kimberley Crook
Financial Accounting Advisory Services


 

Hot topics

  • PBE Publication
    Changing tack - A new set of accounting standards for public benefit entities  

    In May 2013, the New Zealand Accounting Standards Board (NZASB) and its parent body, the External Reporting Board (XRB), issued a package of new accounting standards for public benefit entities (PBEs).

    The new standards will be effective for Tier 1 (publicly accountable or expenses >$30m) and Tier 2 (expenses between $30m and $2m) public sector PBEs from the 2014/2015 financial year.
    The suite of standards will be revised for not-for-profit entities and is expected to be effective from the 2015/16 financial year for Tier 1 and Tier 2 registered charities and other private sector not-for-profit entities. 

    In our latest publication, Changing tack - A new set of accounting standards for public benefit entities we highlight the key differences between the PBE standards and current NZ IFRS. Our publication also outlines the next steps for PBEs and how EY can assist your organisation with preparing for the move to the new standards.


  • New Accouting Standards and Interpretations
    NZ IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors requires disclosure when an initial application of a standard has an effect on the current period, or any prior period, and disclosure of the possible impact of new and revised standards and interpretations that have been issued but are not yet effective.

    The attached publications indicate standards and interpretations which have become effective, and those on issue which are not yet effective, for 30 June 2013 year ends.

    It is important to note that there are two separate publications, one for for-profit entities and one for public benefit entities (PBEs). Differences in the accounting standards framework applying to for-profit entities and PBEs make it important to select the applicable publication.

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Other IFRS news and updates

  • A closer look at the revised lease accounting proposals
    As noted last month, the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) issued the new proposals on lease accounting, proposing a right-of-use model for leases that would require lessees to recognise most leases on their balance sheets.

    Our latest edition of Applying IFRS provides an in-depth analysis of the proposals, including the impact to the classification, accounting and disclosure of leases for both lessors and lessees and also considers practical application according to specific industries.

    Our IFRS Practical Matters publication provides a strategic overview of the proposals and considers potential commercial business applications.


  • IASB proposes interim standard on regulatory deferral accounts
    The IASB has restarted the rate-regulated activities project to determine whether International Financial Reporting Standards should require entities operating in rate-regulated environments to recognise assets and liabilities arising from the effects of rate regulation. The IASB Board has issued an exposure draft (ED) for an interim standard, to provide first-time adopters with the ability to continue recognising assets and liabilities when adopting IFRS until the project is complete.

    This edition of our IFRS Developments publication provides an overview of the key components of the proposed interim standard, and its implications.


  • IASB and FASB discuss credit card rewards and transition for new revenue recognition standard
    In May 2013, the IASB and FASB considered requests for additional guidance on credit card reward transactions and transition requirements for first-time adopters of IFRS in the revenue project.

    This edition of our IFRS Developments publication summarises the Boards’ tentative decisions regarding the new revenue recognition standard and credit card reward programmes.

  • IASB moving towards an improved IFRS framework
    As a result of the feedback received on the Agenda Consultation in 2011, the IASB restarted the Conceptual Framework project in September 2012. In the latest edition of IFRS Outlook we speak to Stephen Cooper, member of the IASB, to get his thoughts on the importance of the project and the challenges faced.

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Industry in focus

Insurance

  • IASB publishes revised proposals for the accounting for Insurance Contracts
    The IASB has published a revised Exposure Draft for proposals on the accounting of insurance contracts, ED 2013/7 Insurance Contracts. The ED builds upon proposals published in 2010, and reflects feedback received during the extensive public consultation period that followed.
    This edition of our Insurance Accounting Alert publication examines the proposed changes to insurance contract measurement principles that are set out in the revised ED.

    Life Sciences

  • Applying IFRS in Life Sciences: Accounting for collaborations in the life sciences sector — Challenges in applying IFRS 10 and IFRS 11
    Accounting for collaboration arrangements can be challenging and it is difficult to determine whether collaborators jointly control the arrangement, or are acquiring intangible and other assets.
    This edition of our Applying IFRS series is intended to assist life sciences entities with the assessment process.

    Public Sector

  •  IPSASB issues Conceptual Framework ED presentation
    The International Public Sector Accounting Standards Board (IPSASB) issued the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities: Presentation in General Purpose Financial Reports ED. This is a milestone in public sector accounting standard setting, as it is the first time that presentation concepts and principles applicable to both general purpose financial statements and general purpose financial reports have been developed.

    This edition of IPSAS Outlook discusses the implications of the proposals.

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On the horizon

Below are recent Exposure Drafts which are currently open for comment to the New Zealand Accounting Standards Board (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
NZASB Request for comments on Amendments to Prospective Financial Statements 11 August 2013    
NZASB Request for comments on Proposed Disclosure Concessions for Tier 2 and Tier 3 For-profit Entities

30 August 2013

 
 

NZASB Request for comments on Amendments to NZ IFRS 4 Insurance Contracts

25 September 2013
 
 
Exposure Draft ED/2013/4 Defined Benefit Plans: Employee Contributions CLOSED 25 July 2013
 
Exposure Draft ED/2013/5 Regulatory Deferral Accounts 16 August 2013 4 September 2013  
Exposure Draft ED/2013/6 Leases 16 August 2013 13 September 2013  

Exposure Draft ED/2013/7 Insurance Contracts

25 September 2013 25 October 2013  
Exposure Draft ED/2013/8 Agriculture: Bearer Plants 27 September 2013 28 October 2013  
IPSASB Public Sector Conceptual Framework Exposure Draft - Presentation (CLOSED)   15 August 2013

 

 

 

 

 

 

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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 9 300 7094

David Pacey

Executive Director, Auckland

+64 212 425 716

Ravi Kumar

Senior Manager, Auckland

+64 212 214 717

Jude Doliente

Senior Manager, Auckland

+64 212 417 481

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.

 

 

 

 

 

 

Contact us

Kimberley Crook
+64 9 300 7094

Graeme Bennett
+64 9 300 8191

Lara Truman
+64 274 899 896

David Pacey
+64 212 425 716

Asia Pacific Financial Accounting Advisory Services contacts.

EY  

 

Eye on Reporting

Eye on Reporting is our monthly update on financial reporting developments.

Please click here to read the current issue.

Applying IFRS in New Zealand

The time for companies to ensure their financial reporting systems comply with NZ equivalents of International Reporting Standards is now. EY provides you with the tools and resources to help you with the task ahead.