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Welcome to the EY Eye on Reporting newsletter, providing you with the latest insights in financial reporting.
This issue includes useful information on a number of current issues, including:
- As Climate Reporting Entities (CREs) head into their third year of mandatory climate reporting, we have published The Future of Climate Reporting that looks at the potential future trends and how climate reporting might evolve in the future
- The NZASB issued two exposure drafts to propose new PBE Standards for revenue and transfer expenses. Click here to learn more
- We have released a publication on the financial reporting implications of the challenges of evolving tariffs and market volatility. Click here to learn more
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The proposed new PBE standards on revenue and transfer expenses
The New Zealand Accounting Standards Board (NZASB) has recently issued an exposure draft to propose a new Public Benefit Entity (PBE) Standard for revenue. The proposed new standard is closely aligned with NZ IFRS 15 Revenue from Contracts with Customers and uses a similar five-step revenue recognition model for transactions where there is a binding arrangement (similar to a contractual arrangement). Once issued, this proposed standard will replace the existing three PBE revenue standards: PBE IPSAS 9 Revenue from Exchange Transactions, PBE IPSAS 11 Construction Contracts, and PBE IPSAS 23 Revenue from Non-Exchange Transactions.
At the same time, the NZASB issued an exposure draft to propose a new PBE Standard for transfer expenses. Unlike revenue, there are no existing PBE Standards that addresses this area of accounting. The proposals provide guidance on accounting for transactions where an entity provides a good, service or other asset without directly receiving something in return. The two exposure drafts are aligned to some extent as the accounting depends on the existence of a binding arrangement.
We have issued a publication that provides you with an overview of the proposed new standards. Click here to learn more.
Financial reporting amid increasing tariffs and market volatility
The recent imposition of tariffs by the United States (US) Government have created volatility in the market, as much of the details on the scope, duration, inclusions and exclusions, and the extent to which retaliatory tariffs imposed against the US remain uncertain. Whilst not intended to be exhaustive, we have released a publication that explores some of the possible financial reporting considerations amid the increasing risk of tariffs. Click here to learn more.
The future of climate reporting
As Climate Reporting Entities (CREs) prepare for their third year of mandatory climate reporting, we have released an article on the Future of Climate Reporting in New Zealand. This article is based on our observations of how climate reporting has evolved in New Zealand and explores the possible trends in the future.
Connected financial accounting: Accounting for climate change
We have recently updated our publication on Connected Financial Reporting: accounting for Climate Change for the amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments and Contracts Referencing Nature-dependent Electricity. This updated publication is intended to provide you with helpful observations and illustrations to support you in assessing connectivity and reporting on the effects of climate change for accounting purposes.
Applying IFRS: A closer look at IFRS 18
NZ IFRS 18, which replaces NZ IAS 1 Presentation of Financial Statements, is effective for reporting periods beginning on or after 1 January 2027. It introduces several new requirements that are expected to impact the presentation and disclosure of most, if not all, entities. The new requirements include classifying all income and expense into specified categories and provide specified subtotals within the statement of profit or loss; mandatory disclosure of management-defined performance measures; and enhanced requirements for the aggregation and disaggregation, location, and labelling of items across the primary financial statements and the notes.
We have recently updated our publication Applying IFRS: a closer look at IFRS 18 to include illustrations as well as frequently asked questions that cover a range of issues regarding the new requirements of NZ IFRS 18.
New accounting standards and interpretations – for-profit and public benefit entities
This for-profit publication provides an overview of the upcoming changes in standards and interpretations (pronouncements) to be applied for 30 June 2025 year ends and those mandatory in future periods. It also summarises the latest IFRIC agenda decisions which should be considered for 30 June 2025 year ends.
The Public Benefit Entity equivalent publication can be found here.
