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Eye on Reporting

June 2012

Welcome to the June edition of Eye on Reporting.

With the spotlight for public benefit entities (PBEs) in New Zealand on the move to a set of accounting standards for PBEs based on International Public Sector Accounting Standards (IPSASs), across the other side of the globe pressure is building for EU governments to adopt accounting standards such as IPSAS to provide better transparency and accountability. In the May 2012 edition of our global newsletter, IFRS Outlook, the Hon. Ruth Richardson, former New Zealand Minister of Finance, Jim Turley, EY’s Chairman and CEO, and Thomas Müller-Marqués Berger, EY’s Global Public Sector Accounting leader and IPSAS Board Member, give their thoughts on the importance of transparency and accountability for governments in the pursuit of long-term fiscal sustainability.

This month we also highlight our views on the latest IFRS / US GAAP convergence efforts and summarise the progress that the International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (US FASB) have made to date. We also discuss the importance of achieving consistency in IFRS and explain the roles played by all those involved, including EY.

In addition, the Financial Markets Authority (FMA) has recently issued Guidance Note: Effective Disclosure. The guidance note explains the approach the FMA intends to take in reviewing prospectuses and investment statements for compliance with the law, and provides the FMA’s views on good practice for preparing these disclosure documents. The guidance note can be found under this month’s Hot Topics section.

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

+64 274 899 049

Lara Truman

Executive Director, Wellington

+64 274 899 896

Ravi Kumar

Senior Manager, Auckland

+64 212 214 717

Jude Doliente

Manager, Auckland

+64 212 417 481

David Bassett

Senior Accountant, Auckland

+64 274 899 883

Kind regards
Kimberley Crook
Financial Accounting Advisory Services


Hot topics

  • Time for governments to come clean

    In our May 2012 edition of IFRS Outlook, the Hon. Ruth Richardson, former New Zealand Minister of Finance, Jim Turley, EY’s Chairman and CEO, and Thomas Müller-Marqués Berger, EY’s Global Public Sector Accounting leader and IPSAS Board Member, give their thoughts on the importance of transparency and accountability for governments in the pursuit of long-term fiscal sustainability.

  • Convergence – a moving target?

    Finance ministers and central bank governors of the G-20 have urged the IASB and the US Financial Accounting Standards Board (US FASB) to meet their target of issuing standards on key convergence projects by mid-2013 at the latest. Read a progress summary of the Boards’ joint projects to date.

  • Consistency in IFRS — no borders, one language: dream or reality?

    Consistency in the application of IFRS is crucial to achieving a single set of high-quality global accounting standards. Read more about the roles that the IFRS Foundation and others, including EY, play in ensuring consistency.

  • Financial Markets Authority – Guidance note: Effective Disclosure 

    As part of the Financial Markets Authority’s (FMA) objective to promote and facilitate the development of fair, efficient, and transparent financial markets, the FMA have recently issued Guidance note: Effective Disclosure. The guidance note explains the approach the FMA intends to take in reviewing prospectuses and investment statements for compliance with the law, and provides the FMA’s views on good practice for preparing these disclosure documents. The guidance note can be found here.  

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IFRS news and updates

  • The future of the IASB’s agenda 

    The International Accounting Standards Board (IASB) is in the process of completing its first formal public consultation on its future work plan. Read more about the feedback received by the Board along with our views on the agenda.

  • Joint revenue recognition project – Boards to begin re-deliberations on key issues

    The IASB and the US FASB have completed their evaluation of the feedback on the joint revenue recognition project. Re-deliberations will begin in June 2012 and are expected to continue through to December 2012. Our Applying IFRS publication summarises what you need to know about these re-deliberations.

  • Offsetting financial instruments: clarifying the amendments 

    In this edition of Applying IFRS, we summarise some of the issues recently raised around the offsetting criteria in IAS 32 Financial Instruments: Presentation and the disclosures on offsetting financial assets and financial liabilities in IFRS 7 Financial Instruments: Disclosures.

  • Financial instruments – the GAAP differences continue to narrow

    Our IFRS Developments (Issue 31) publication discusses key differences between IFRS and US GAAP with regard to the classification and measurement of financial instruments.

  • The IASB decouples macro hedge accounting from the IFRS 9 projects (May 2012)

    Our IFRS Developments (Issue 30) publication summarises what you need to know about recent decisions around macro hedging.

  • Annual improvements to IFRSs 2009 - 2011

    In May 2012, the IASB issued the Annual Improvements to IFRSs 2009 - 2011 Cycle exposure draft (ED). The ED contains necessary, but non-urgent, proposed changes to 11 IFRS standards (excluding consequential amendments). In IFRS Developments (Issue 29), we provide an overview of the proposed changes.

  • IFRIC update – May 2012 

    At its May meeting, the IFRS Interpretations Committee (IFRIC) discussed items on its current agenda, the IFRIC’s recent tentative decisions, issues being considered for the Annual Improvements project and the post implementation review of IFRS 8 Operating Segments.

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Industry in focus

Insurance

  • Insurance Accounting Alert  

    In this Insurance Accounting Alert, we summarise the Boards’ recent discussions around reinsurance accounting, insurance contracts and decisions on policy loans and riders.

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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
ED External Reporting Board Standard A1 Accounting Standards Framework (For-profit Entities Update) 
3 August 2012
 
 
ED 2012-1 Framework: Tier 1 and Tier 2 For-profit Entities (NZ IFRSs) 
3 August 2012
 
 
ED 2012-2 Framework: Tier 3 For-profit Entities (NZ IFRS Diff Rep) 
3 August 2012
 
 
ED 2012-3 Framework: Public Benefit Entities (NZ IFRS PBE) 
3 August 2012
 
 
Exposure Draft ED/2012/1 Annual Improvements to IFRSs 2010-2012 Cycle 
6 August 2012
5 September 2012
 
ED - IPSASB ED 47 - Financial Statement Discussion and Analysis 
25 June 2012
 
31 July 2012

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Events and Webcasts

  • The lessons learnt from year end reporting

    In this webcast, hosted by EY's Global IFRS Services, a panel of EY professionals will reflect on the challenges for 2011 year-end reporting, including the approach to consolidating companies, identifying impairments and valuing financial assets. The panel will also identify key accounting issues that arose due to the economic environment, and will discuss trends in financial reporting, including:

    • the levels of acquisitions and disposals
    • disclosures of judgmental areas
    • the impact of future accounting standards such as IFRS 11 Joint Arrangements and the proposed Leases standard.

    This global webcast will be presented live on the following date and times:

    Wednesday 27 June, 2012
    11:00am New Zealand

    Click here for more information or to register for this webcast.

If you missed any of the recent global webcasts you can now watch them via the webcast archive. 

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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

+64 274 899 049

Lara Truman

Executive Director, Wellington

+64 274 899 896

Ravi Kumar

Senior Manager, Auckland

+64 212 214 717

Jude Doliente

Manager, Auckland

+64 212 417 481

David Bassett

Senior Accountant, 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.

Stay up-to-date with the shifting world of IFRS with EY's Eye on Reporting

Local IFRS resources

Please see our Local IFRS site for extensive international resources, thought leadership and web based learning modules.

 

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.