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Eye on Reporting

June 2013

Welcome to the June edition of Eye on Reporting.

On 22 May 2013 the Commerce Select Committee reported back on the Financial Reporting Bill 2012 (the Bill). The Select Committee has recommended that the Bill be passed as law, with some minor amendments. This brings us a step closer to the finalisation of the new financial reporting framework, making it more important than ever for organisations to ensure they fully grasp their future reporting requirements. In our publication, The great divide: The new financial reporting framework in New Zealand nears finalisation, we provide an overview of the new financial reporting framework as it stands at June 2013 and highlight the next steps in finalising the framework.

On 23 May 2013, the External Reporting Board and its sub-board, the New Zealand Accounting Standards Board, issued a package of new accounting standards that will be applied by Tier 1 and Tier 2 public sector PBEs, for periods beginning on or after 1 July 2014. We summarise the package below in our hot topics section.

This month we also bring you our publication A second take: The commercial impacts of a proposed new accounting standard on leases, which provides an overview of the new lease accounting proposals, issued last month by the International Accounting Standards Board (IASB), and highlights the commercial impacts of the proposals.

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

Lara Truman

Executive Director, Wellington

+64 274 899 896

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

  • The great divide: the new financial reporting framework in New Zealand nears finalisation
    In May 2013 the new financial reporting framework moved two steps closer to finalisation. This first step was the recommendation made by the Commerce Select Committee to pass the Financial Reporting Bill 2012 as law, with some minor amendments. The second step was the issuance of PBE Standards to be applied by Tier 1 and Tier 2 public sector public benefit entities (PBEs), by the External Reporting Board (XRB) and its sub-board, the New Zealand Accounting Standards Board (NZASB).

    In this publication we provide an overview of the new financial reporting framework as it stands at June 2013, and summarise the impact the framework will have on for-profit and PBEs. We also highlight the next steps in finalising the framework.


  • Public Sector PBE Standards
    In late May 2013, the XRB and NZASB issued a package of new accounting standards to be applied by Tier 1 and Tier 2 public sector PBEs. The new PBE Standards are based on International Public Sector Accounting Standards (IPSAS) and have been modified as appropriate for New Zealand circumstances. Tier 1 and Tier 2 public sector PBEs will need to prepare their first set of financial statements under the new PBE Standards for periods beginning on or after 1 July 2014, which means from June 2015 year-ends (early adoption is not permitted). The Standards require comparative information for the previous financial year, which for most public sector PBEs will be the year beginning 1 July 2013.

    The package of Standards consists of the following standards:
    • Standard XRB A1 Accounting Standards Framework (For-profit Entities plus Public Sector Public Benefit Entities Update) that will apply to all reporting entities and is an update to XRB A1 (For-profit Entities) to operationalise the new accounting standards framework for public sector PBEs; and
    • A suite of 39 Standards comprising both PBE Standards and PBE Standards Reduced Disclosure Regime (PBE Standards RDR) that will appy to public sector PBEs in Tier 1 and  Tier 2 respectively.
       
    The package also contains the following pronouncements:
    • The Public Benefit Entities (conceptual) Framework; and
    • A revised Explanatory Guide (EG A1 (FP Entities + PS PBEs Update) to assist entities understand and apply Standard XRB A1 (FP Entities + PS PBEs Update) is also included in the package.
    As a result of feedback received from constituents, a number of changes have been made to the final PBE Standards from the exposure drafts issued for comment in July 2012. These changes include adopting the “Other Comprehensive Income” presentation approach currently applied by PBEs reporting under NZ IFRS, which is not part of IPSAS and was not included in exposure drafts. 

    More information on the package of new accounting standards can be found on the XRB website (www.xrb.govt.nz).  Also look out for our publication on the new PBE standards, which will be included in next month’s edition of Eye on Reporting.


  • A second take: The commercial impacts of a proposed new accounting standard on leases
    Our publication, A second take: The commercial impacts of a proposed new accounting standard on leases, provides an overview of the new leases exposure draft, as issued by the International Accounting Standards Board (IASB) for comment in May 2013, and highlights the commercial impacts of the proposals.
    This publication has been written using non-technical accounting language and is suitable for readers with financial reporting and non-financial reporting roles.

     

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IFRS news and updates

  • IASB issues IFRIC Interpretations 21 Levies
    IFRIC Interpretation 21 Levies clarifies the accounting for levies imposed by governments. The scope of the interpretation is broad and covers all levies except outflows that are in the scope of IAS 12 Income Taxes and penalties for breaches of legislation.

    This edition of our IFRS Developments publication summarises the implications of IFRIC Interpretation 21 Levies.


  • IASB concludues its re-deliberations on the hedge accounting project
    The IASB has concluded its re-deliberations on the hedge accounting project, which is the third phase of the overall project replacing IAS 39.
    This edition of our IFRS Developments publication summarises discussions held by the IASB on the interaction between macro cash flow hedge accounting and the new hedge accounting model.
     

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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

Package 3: NFP Simple Format Accounting Standards

28 June 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 prospective Financial Statements

11 August 2013
 
 
Exposure Draft ED/2013/3 Financial Instruments: Expected Credit Losses CLOSED 5 July 2013
 
Exposure Draft ED/2013/4 Defined Benefit Plans: Employee Contributions 5 July 2013 4 September  
Exposure Draft ED/2013/5 Regulatory Defferal Accounts 16 August 2013 4 September 2013  

Exposure Draft ED/2013/6 Leases

16 August 2013 13 September 2013  
IPSASB Public Sector Conceptual Framework Exposure Draft - Presentation 12 July 2013   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

Lara Truman

Executive Director, Wellington

+64 274 899 896

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.

Applying IFRS in New Zealand

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Local IFRS resources

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