New leases standard for PBEs

Proposals for Tier 1 and Tier 2 public sector and not-for-profit entities

We are seeking feedback on our Exposure Draft (ED), which proposes a new lease accounting standard. The proposals are based on the recently-issued IPSASB standard IPSAS 43 Leases, which is aligned with the for-profit standard IFRS 16 Leases.

The proposals require lessees to recognise almost all leases on the statement of financial position. For lessors, the accounting requirements remain largely unchanged.

The proposals will allow New Zealand public benefit entities (PBEs) to benefit from the latest international thinking on lease accounting. The proposals will enhance transparency around PBEs’ leases, and make it easier for ‘mixed groups’ containing both PBEs and for-profit entities to prepare group financial statements.

We have previously consulted in New Zealand on the IPSASB's exposure drafts (EDs) on leases, which the IPSASB has finalised in IPSAS 43. The feedback we received indicated broad support for the proposals to align lease accounting with IFRS 16 (except for concerns with respect to accounting for concessionary leases).

Note on concessionary leases

Our proposals do not include fair value measurement requirements for concessionary leases (i.e. leases with below-market terms). The IPSASB is considering this matter under a separate project which will likely result in a separate consultation in 2023.

We value your feedback on the proposed new PBE Standard on leases. Your comments will help us ensure that PBE Standards provide for appropriate reporting outcomes for public sector and not-for-profit reporting entities in Aotearoa New Zealand.


Consultation

This consultation is on the proposed new lease accounting standard for Tiers 1 & 2 Public Benefit Entities.

Click here to read the Consultation Document and the Exposure Draft.

The consultation closes 25 November 2022.

A short webinar is coming soon.

 


How to provide feedback

Comments are due by 25 Novemeber 2022.

Send us your comments – both formal and informal – using the secure upload form below, or by emailing accounting@xrb.govt.nz.

We intend on publishing all comments on the XRB website, unless they may be defamatory. If you have any objection to this, we will not publish them. However, they will remain subject to the Official Information Act 1982 and, therefore, may be released in part or in full. The Privacy Act 1993 also applies.