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Eye on Reporting - August 2012

August 2012

Welcome to the August edition of Eye on Reporting.

On 31 July 2012, the Financial Reporting Bill (“the Bill”) was introduced to Parliament. The Bill reflects the Government’s proposed changes to the New Zealand statutory financial reporting framework concerning which entities are required to prepare General Purpose Financial Reports, along with related audit and filing requirements. If passed into legislation, the Bill will replace the Financial Reporting Act 1993 and have consequential amendments to other Acts. We provide an overview of the key changes included in the Bill in our publication Update – Financial Reporting Bill 2012.

This month we also highlight;

  • Our Surveying IFRS publication, where we take a look at the lessons learned from 31 December year end reporters and the current and future challenges as a result of the economic turbulence of the past few years.
  • Our third issue of Reporting Magazine, which addresses the broad topics around reporting and governance and is designed to put financial reporting in a business context. The magazine contains a mixture of business, regulatory and investor views that will be of interest to all financial reporting professionals.

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

  • Update – Financial Reporting Bill 2012
    In this Update we summarise the key changes included in the Financial Reporting Bill (the “Bill), including changes to financial statement preparation, audit and filing requirements.
    Introduced to Parliament on 31 July 2012, the Bill reflects the Government’s proposed changes to the statutory financial reporting framework. The underlying principle of the Bill is for the statutory financial reporting system to provide financial information to external users who have a need for an entity’s financial statements but are unable to demand them. The Bill uses three indicators for when financial reporting is in the public interest: public accountability (e.g. issuers and public sector entities), economic significance (i.e. entity size) and separation of owners/members of the entity and its management.  If passed, the Bill will replace the Financial Reporting Act 1993 and cause consequential amendments to many other Acts.

  • Surveying IFRS: Lessons learned from year end reporting 
    This publication provides an evaluation of the effect of the deteriorating economy on the December 2011 financial statements of more than 50 large overseas companies across 10 sectors. It highlights key accounting issues that arose due to the economic environment, and looks ahead to likely developments in the eurozone sovereign debt crisis and business and consumer sentiment.

  • Reporting Magazine – July 2012
    Those who have responsibility for corporate reporting are operating in a continuously shifting landscape. One such change is the growing influence of developing markets. With an expanding consumer base and rapidly developing infrastructure, these markets offer clear growth opportunities. Companies will need to examine the changes in corporate governance, risk, fraud and regulation in these countries, and articulate a compelling story against the backdrop of volatile investor confidence. These themes weave through many of the articles in issue three of Reporting.

    July 2012 Reporting is available electronically , included on the EY Insights App and as a stand-alone App via iTunes.

  • Annual leave liability changes 
    NZ IAS 19 (as amended in 2011) is effective for periods beginning on or after 1 January 2013. It will affect not only those entities with defined benefit plans, but also affect entities with annual leave balances. Entities that allow employees to accrue their annual leave balances could find that there is a significant changes to their annual leave liability.
    This publication has been developed by EY Australia and addresses how the amendments will affect the calculation and classification of annual leave balances. While written in an Australian context, this publication is equally applicable to entities applying NZ IFRS. However, references to the Australian  accounting standard AASB 119 should be read as referring to the New Zealand equivalent standard NZ IAS 19.

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IFRS news and updates

  • Transition guidance amendments for IFRS 10, IFRS 11 and IFRS 12 
    Issue 35 of IFRS Developments discusses the amendments issued by the International Accounting Standards Board (IASB) that change the transition guidance to provide further relief from full retrospective application.
  • Impairment of financial instruments – the last details? 
    The IASB and the US Financial Accounting Standards Board (FASB) recently discussed the disclosures required to accompany the proposed IFRS 9 Financial Instruments expected loss impairment model and its application to loan commitments and financial guarantee contracts.
    Issue 37 of IFRS Developments summarises what you need to know in light of these recent tentative decisions made by the Boards.
  • Financial instruments – Classification and measurement – joint deliberations now complete 
    The IASB and the FASB recently discussed accounting for the reclassification of financial assets between measurement categories and related disclosures. At a separate meeting, the IASB discussed transitional provisions and disclosure requirements that will accompany the limited modifications to IFRS 9 Financial instruments.

    Issue 38 of IFRS Developments summarises what you need to know in light of these recent tentative decisions made by the Boards.
  • SEC issues Final Report on work plan for incorporation of IFRS 
    The SEC staff has issued its Final Report on its Work Plan for the Consideration of Incorporating International Financial Reporting Standards into the Financial Reporting System for U.S. Issuers, summarising what it has learned.

    Issue 36 of IFRS Developments summarises the key points from the SEC staff paper and the initial reactions from the IASB.
  • IASB begins post-implementation review of IFRS 8
  • The IASB has begun the public part of its review of IFRS 8 Operating Segments by publishing for comment a Request for Information (RFI) on the effect of implementing the standard. The review seeks feedback on whether the standard is functioning as intended, as well as more practical information on the challenges and costs associated with implementing the standard.

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Industry in focus

Insurance

  • Insurance Accounting Alert 
    In this Insurance Accounting Alert, we summarise the Boards’ recent decisions around the allocation of cash flows and the ongoing discussions on the earned premium presentation for contracts.

    Media and Entertainment

  • Applying IFRS in media and entertainment: oint revenue recognition project – key issues  
    This edition of Applying IFRS summarises the more significant themes of the feedback the IASB and FASB received from the media and entertainment industry on the re-exposure of their joint revenue recognition proposal, as well as the Boards' next steps.

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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 2: Public Sector PBE Accounting Standards 
14 December 2012
 
 
 Exposure Draft ED/2012/1 Annual Improvements to IFRSs 2010-2012 Cycle 
CLOSED
5 September 2012 
 
 Draft IFRIC Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market 
CLOSED
5 September 2012
 
Draft IFRIC Interpretation DI/2012/2 Put Options Written on Non-controlling Interests 
14 September 2012
1 October 2012
 
  IASB Request for Information Comprehensive Review of the IFRS for SMEs 
12 October 2012
 30 November 2012
 

IASB’s Request for Information – Post-implementation Review: IFRS 8 Operating Segments

19 October 2012

16 November 2012

 
 IPSASB Consultation Paper - Public Sector Combinations 
1 October 2012
 
31 October 2012
 Consultation on IPSASB Work Programme 2012-2014 
15 October 2012
 
31 October 2012

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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 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.

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.

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.