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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:
- The FMA has released a report on its observations of related-party disclosures in the financial statements of managed investment schemes and their managers. It also considers disclosures regarding fair value measurement of investments. Click here to learn more
- The XRB issued amendments to NZ IAS 28 to clarify which entities qualify to account for their investments in associates and joint ventures using the fair value option. Click here to learn more
- As climate reporting begins to mature around the world, the XRB has issued two consultation documents on climate reporting in New Zealand. The first relates to the future roadmap for climate reporting in New Zealand and the second looks to align the scope 3 disclosures in New Zealand with the international requirements
Featured
Related-party disclosure in financial statements by MIS managers and investment schemes
The Financial Markets Authority (FMA) issued a report to highlight its observations of related-party disclosures in the financial statements of Managed Investment Schemes (MIS) and their managers. This report provides practical examples of ‘good’ disclosures for related party relationships and transactions. The report also provides guidance on things to consider when valuing investments, specifically where the valuation process is completed by a related party. Click here to learn more.
Amendments to NZ IAS 28 – Amendments to the fair value option for investments in associates and joint ventures
The XRB issued a narrow-scope amendment to NZ IAS 28 Investments in Associates and Joint Ventures to clarify which entities are able to apply the fair value option to measure investments in associates and joint ventures instead of the equity method. The amendments link the description of a venture capital organisation to entities that have a main business activity of investing in assets as defined by NZ IFRS 18 Presentation and Disclosure in Financial Statements. Click here for more information.
IFRS 20 Regulated Assets and Regulated Liabilities
The IASB issued IFRS 20 Regulated Assets and Regulated Liabilities, which sets out the requirements for the recognition, measurement, presentation, and disclosure of rate-regulated activities. The standard aims to improve financial reporting by recognising the timing difference created between when goods and services are provided to customers and when the related amounts are recovered from customers. IFRS 20 is effective for annual periods beginning on or after 1 January 2029, with early adoption permitted. Click here to learn more.
Climate reporting roadmap
The XRB issued a consultation on the proposed climate reporting roadmap and is currently seeking feedback on the future of climate reporting in New Zealand. The roadmap proposes a new internationally aligned climate standard, NZ IFRS S2 Climate-related Disclosures, to replace the existing Aotearoa New Zealand Climate Standards. The XRB also issued proposed amendments to disclosures required for scope 3 greenhouse gas (GHG) emissions to align them with the international requirements. Further information on the climate roadmap can be found here and click here to learn more about the proposed changes to scope 3 GHG emissions disclosures.
Climate-related disclosures insights report
The FMA released a report outlining its observations and insights from its review of climate statements prepared in the second year of mandatory climate reporting in New Zealand. The report is designed to provide climate reporting entities with useful feedback and illustrative examples to support the continuous improvement of their climate statements. Click here to learn more.
