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Eye on Reporting

March 2012

Welcome to the March edition of Eye on Reporting.

At its March meeting, the External Reporting Board (XRB) confirmed the financial reporting framework applying to public benefit entities (PBEs) would include a new set of PBE accounting standards based on International Public Sector Accounting Standards.  In response to concerns about the time needed to prepare for the move to the new standards, the XRB also decided to delay the mandatory adoption dates by one year from the initial proposals. This means that public sector PBEs will adopt the PBE Standards for periods beginning on or after 1 July 2014 (i.e. from June 2015 year-ends onwards) and not-for-profit entities will adopt the standards for periods beginning on or after 1 April 2015 (i.e. from March 2016 year-ends onwards).  Our recent publication Financial reporting: preparing for change provides insights into moving to a new set of PBE accounting standards and common issues that PBEs will be likely to face in making this transition.

The International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (US FASB) have explored some potential changes to their previous tentative decisions in their joint leases project. The boards have agreed to do some more outreach and research before issuing a second exposure draft. This will likely delay the issue of a second exposure draft until at least the third quarter of 2012. Our issue of IFRS Developments provides you with the latest insights on this matter.

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

  • Financial reporting: preparing for change
    We are about to experience a significant shift in the statutory financial reporting requirements for public benefit entities (PBEs).  In the future, PBEs will need to apply a new set of accounting standards, which is being developed specifically for PBEs, based on International Public Sector Accounting Standards (IPSAS). This publication provides our insights into what PBEs can expect when transitioning to the new set of PBEs accounting standards and common issues that will need to be addressed in making the transition.

  • IFRS Developments Issue 25: Boards weighing effects of putting leases on the balance sheet The International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (US FASB) remain committed to putting leases on the balance sheet. However, they continue to struggle with how to recognise related lease revenue and expense. This is likely to delay a new exposure draft

  • This IFRS Developments publication summarises what you need to know about the status of the leases project.

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IFRS news and updates

  • IFRS Developments - Issue 24: IFRS Foundation changes to governance 
    The IFRS Foundation published two reports on 9 February 2012 that include key decisions on the organisation's governance and strategy. In this issue of IFRS Developments we discuss the principal highlights of the reports, including a number of proposals made on the composition and structure of the IASB, Trustees, and Monitoring Board of the IFRS Foundation.

  • Of note are the recommendations to limit the membership of the Monitoring Board to only those jurisdictions that commit to domestic use of IFRS in the jurisdiction’s capital market and participate in the funding of the IFRS Foundation. The reports also include the decision not to open membership of the Monitoring Board to stakeholders outside of capital market authorities.

  • IFRS practical matters: Impairment – assessing the impact of the new proposal 
    A new edition of the thought leadership series, IFRS Practical Matters. This edition, Impairment - assessing the impact of the new proposal complements our recent IFRS publication, IFRS Developments Issue 21: Impairment — a major step forward in achieving convergence (December 2011). This publication provides a summary of the currently proposed "three-bucket" credit impairment approach, as well as our views on the next steps for financial institutions.

  • Due process handbook
    The IASB Due Process Handbook has been updated to consolidate amendments made by the IFRS Foundation Trustees in 2011.
    The Handbook describes the consultative arrangements of the IASB.

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Industry in focus

Insurance

  • IFRS Developments for Insurers: Premium allocation approach 
    The IASB and the FASB held education sessions in January to discuss the tentative decisions in the IASB’s exposure draft Insurance Contracts and in the FASB’s Discussion Paper Preliminary Views on Insurance Contracts. The only topic discussed was the premium allocation method (PAA). In this issue of IFRS Developments for Insurers we summarise the PAA discussions and highlight the potential impact for insurers.

Telecommunications

  • Applying IFRS in telecommunications 
    The IASB’s second exposure draft related to their new revenue accounting model has carried forward the elimination of the contingent revenue cap for bundled handset and monthly service arrangements. The proposal would require many mobile companies to allocate more revenue to handsets that are sold in a bundle with service contracts.

  • In this edition of Applying IFRS – The revised revenue recognition proposal – telecommunications, you will find an analysis of the impact of the boards’ proposal on mobile and wireline telecom companies. The publication includes examples to illustrate how the proposal would be applied under various scenarios along with a comparison to existing standards.

Retail and Consumer Products

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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
IPSASB Consultation Paper Reporting Service Performance Information 
CLOSED
-
15 April 2012
ED - IPSASB Consultation Paper Presentation 
30 April 2012
 
31 May 2012

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Events and Webcasts

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.

EY  

 

Eye on Reporting

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

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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.