|This NZASB Update provides you with an overview of the New Zealand Accounting Standards Board’s recent activities, any new standards or interpretations, as well as other matters of interest.|
New amending standard
The NZASB has issued an amending standard.
Long-term Interests in Associates and Joint Ventures
(Amendment to NZ IAS 28)
This amending standard clarifies that a for-profit entity is required to apply NZ IFRS 9 Financial Instruments, including its impairment requirements, to interests in an associate or joint venture to which the equity method is not applied.
These interests include long-term interests that, in substance, form part of the net investment in the associate or joint venture. Such interests may include preference shares, and long-term receivables or loans, but do not include trade receivables, trade payables or any long-term receivables for which adequate collateral exists, such as secured loans.
This amending standard is effective for annual periods beginning on or after 1 January 2019 with early application permitted.
NZASB December meeting
The NZASB met on Thursday 14 December to discuss a range of topics affecting both public benefit entities (PBEs) and for-profit entities.
Agenda items included IPSASB CP Accounting for Revenue and Non-Exchange Expenses, IPSASB ED 62 Financial Instruments, IPSASB ED 63 Social Benefits, limited scope amendments to Tier 3 and Tier 4 PBE Accounting Requirements, and proposed RDR concessions for NZ IFRS 16 Leases and NZ IAS 7 Statement of Cash Flows.
Statutory financial reporting size thresholds
When determining whether a for-profit entity has a statutory financial reporting requirement to prepare general purpose financial statements in accordance with, for example, the Financial Reporting Act 2013 and the Companies Act 1993, an entity needs to consider whether it exceeds the statutory size thresholds (i.e. whether it is “large”).
For a for-profit entity, these size thresholds are based on “total assets” and “total revenue”.
XRB A2 Meaning of Specified Statutory Size Thresholds sets out the manner in which total assets and total revenue is determined.
Where the entity has not prepared financial statements (or where financial statements are not prepared in accordance with accounting standards issued by the XRB or the NZASB) total assets and total revenue are the respective amounts derived from the entity’s accounting records, determined in accordance with Tier 2 Accounting Requirements (i.e. NZ IFRS RDR) that would be relevant to the entity if it were reporting in accordance with those standards.
It is important to note that an entity cannot use the amounts recorded under the IRD minimum financial reporting requirements, the CA ANZ Special Purpose Financial Reporting Framework or those presented in the management accounts (unless those amounts have been determined using the same recognition and measurement requirements as NZ IFRS RDR).
In case you missed it…
IPSASB roundtables – Wellington and Auckland
Ian Carruthers, Chair of the International Public Sector Accounting Standards Board (IPSASB) will be presenting at roundtables in:
- Wellington on 8 February 2018 at 1:00PM–4:00PM; and
- Auckland on 23 February 2018 at 9:00AM–12:00PM.
The roundtables will cover the IPSASB’s Strategy and Work Plan 2019–2023 Consultation, ED 63 Social Benefits and the forthcoming ED 64 Leases.
Registration for the roundtables will be open in January 2018.
XRB office closure
The XRB offices will be closed for the holiday period from Friday 22 December and will
re-open at 9:00AM on Monday 8 January 2018.
Thank you for your contributions to our work programme over the past year. Your comments and feedback are an important part of making sure our standards are appropriate for the New Zealand reporting environment.
Have a happy holiday break, and best wishes for 2018.
This NZASB Update is intended to provide subscribers with a summary of the recent activities of the New Zealand Accounting Standards Board’s (NZASB). Links to websites are correct at the time of publication. Subscribers should not rely on this newsletter as a definitive publication of updates. The External Reporting Board and its sub-Board the NZASB do not guarantee, and accept no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency, timeliness or completeness of this newsletter. The information contained in this newsletter does not constitute advice and should not be relied upon as such.