Eye on Reporting
EY monthly financial reporting newsletter
Welcome to the March edition of Eye on Reporting.
In response to calls for enhanced corporate reporting, our latest publication, Enhancing communication effectiveness, explores ways of making IFRS financial statements more effective in communicating relevant financial information and improving their understandability for users. The publication draws on innovative practices by using real-life examples.
This month we also highlight:
- Our Applying IFRS publications that discuss the potential implications of IFRS 16 Leases for oil and gas, and tank terminal entities
- Illustrative financial statements of Good Mining (International) Limited and subsidiaries for the annual period ending 31 December 2016
- New Zealand Accounting Standards Board’s amending standards and a new IFRIC Interpretation
- International Accounting Standards Board’s decision to amend guidance on the treatment of experience adjustments and the grouping of insurance contracts affected by regulatory pricing
- A new International Public Sector Accounting Standards Board standard on public sector combinations
Kimberley Crook and Graeme Bennett
Financial Accounting Advisory Services
Eye on Reporting headlines:
- What’s new from EY
- IFRS news and other updates: for-profit entities
- IPSAS news and other updates: public benefit entities
- Events and webcasts
- On the horizon
What’s new from EY?
This EY Global publication explores ways of making IFRS financial statements more effective in communicating relevant financial information. It draws on innovative practices by using real-life examples.
Oil and gas and tank terminal entities will need to change some accounting practices and, potentially, some business practices. IFRS 16 Leases significantly changes the accounting for oil and gas and tank terminal lessees, requiring them to recognise most lease contracts on their balance sheets.
This edition contains the illustrative financial statements of Good Mining (International) Limited and subsidiaries for the annual period ending 31 December 2016. It is prepared in accordance with IFRS issued as at 30 September 2016.
Please note that this publication is based on ‘pure’ IFRS, and does not cover New Zealand additional disclosure requirements.
IFRS news and other updates: for-profit entities
NZASB issued two amending standards and an IFRIC Interpretation
In February 2017, the New Zealand Accounting Standards Board (NZASB) issued the following amendments and interpretation:
- Annual Improvements to NZ IFRSs 2014-2016 Cycle
This amending standard is based on amendments issued by the International Accounting Standards Board (IASB) as part of its Annual Improvements process. This amending standard contains amendments to NZ IFRS 1, NZ IFRS 12 and NZ IAS 28. The amendments to NZ IFRS 1 are to remove short-term exemptions. The amendments to NZ IFRS 12 and NZ IAS 28 are clarifying in nature.
The amendments have a range of effective dates, with the earliest being for annual periods beginning on or after 1 January 2017. Annual Improvements to NZ IFRSs 2014-2016 Cycle can be found here.
- Transfers of Investment Property (Amendments to NZ IAS 40)
This amending standard clarifies the requirements as to when there is a change in the use of a property, supported by evidence, which causes a transfer into, or out of, investment property. The amending standard is effective for annual periods beginning on or after 1 January 2018 with early application permitted.
Transfers of Investment Property (Amendments to NZ IAS 40) can be found here.
- NZ IFRIC 22 Foreign Currency Transactions and Advance Consideration
This Interpretation clarifies which exchange rate to use in reporting foreign currency transactions when a payment is made or received in advance. NZ IFRIC 22 is effective for annual periods beginning on or after 1 January 2018 with early application permitted.
NZ IFRIC 22 Foreign Currency Transactions and Advance Consideration can be found here.
IASB amends guidance on the treatment of experience adjustments and the grouping of insurance contracts affected by regulatory pricing
During the February meeting, the IASB completed its discussions on the findings from the external editorial review draft of IFRS 17 Insurance Contracts. The review took place in December 2016. The decisions made at the meeting demonstrate the Board’s continued willingness to consider and respond to input on the clarity and operability of its proposals. The effective date of 1 January 2021 is a relatively long period for implementation, compared with other standards. However, due to the complexity of IFRS 17, companies cannot afford to wait and will need to start preparing for implementation soon.
IPSAS news and other updates: public benefit entities
IPSASB issued IPSAS 40 Public Sector Combinations
The International Public Sector Accounting Standards Board (IPSASB) issued a new accounting standard. IPSAS 40 Public Sector Combinations provides the first international accounting requirements that specifically address the needs of the public sector when accounting for combinations of entities and operations. IPSAS 40 applies from 1 January 2019, with earlier adoption encouraged.
At its last meeting in February 2017, the NZASB agreed that an NZASB exposure draft based on this standard should be developed.
Events and webcasts
Archived recordings of all our previous webcasts are available here.
On the horizon
Below are recent proposals that are currently open for comment to the NZASB, IASB and/or 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
31 March 2017
17 March 2017
12 April 2017
26 May 2017
For more information on any of the points raised in this newsletter, please contact a member of EY Financial Accounting Advisory Services Team:
|Kimberley Crook – Partner, Auckland||+64 274 899 535|
|Graeme Bennett – Partner, Auckland||+64 274 899 943|
|David Pacey – Executive Director, Auckland||+64 212 425 716|
|Lara Truman – Executive Director, Wellington||+64 274 899 896|
|Alex Knyazev – Senior Manager, Auckland||+64 218 53 152|
|Charis Halliday – Senior Manager, Wellington||+64 275 543 047|
|Yulia Bogatova – Manager, Auckland||+64 274 899 408|
|Gali Slyuzberg – Manager, Wellington||+64 274 899 565|
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.