Presentation of Financial Statements
IPSASB Consultation Paper
|
|
We are seeking feedback on the Consultation Paper Presentation of Financial Statements, issued by the International Public Sector Accounting Standards Board (IPSASB). The Consultation Paper proposes to introduce a new standard on presentation and disclosure in financial statements – to enhance the communication effectiveness of public sector entities' financial statements. The proposals aim to bring a more structured approach to the presentation of public sector entities’ financial statements, as well as enhanced guidance on the grouping of information within the financial statements, with primary users' needs in mind. Once the IPSASB issues the proposed new standard, the New Zealand Accounting Standards Board (NZASB) will consider whether and how to incorporate it into PBE Standards for Tier 1 and Tier 2 public benefit entities (PBEs) in the public and not-for-profit sectors in New Zealand. We will consult separately on any new or amended New Zealand PBE Standards arising from this project. |
Why were the proposals issued
Presentation and disclosure requirements in accounting standards play a key role in helping entities communicate information about their financial performance, position and cash flows to users of financial statements – supporting accountability and decision-making.
In the IPSAS suite of standards, IPSAS 1 Presentation of Financial Statements sets out the general presentation and disclosure requirements in financial statements. In New Zealand, PBE IPSAS 1 Presentation of Financial Reports for Tier 1 and Tier 2 PBEs is based on IPSAS 1.
To enhance the communication effectiveness of public sector entities’ financial statements, the IPSASB Consultation Paper proposes to replace IPSAS 1 with a new standard, based on IFRS 18 Presentation and Disclosure in Financial Statements as issued by the International Accounting Standards Board, with modifications for the public sector context.
The key proposals and what they aim to achieve
|
New categories and subtotals in the statement of financial performance |
|
The Consultation Paper proposes to introduce the following changes for the statement of financial performance:
With this more structured approach to presenting revenue and expenses, the IPSASB aims to make public sector entities' financial statements easier to understand, compare and analyse - to help public sector entities meet their accountability obligations and users' decision-making needs. |
|
Enhanced guidance on the grouping of information |
|
The Consultation Paper proposes enhanced guidance on the grouping of information in financial statements – including requirements on aggregation and disaggregation of information in the primary financial statements and in the notes. These proposals aim to help public sector entities present their primary financial statements and notes in a way that is relevant and useful to users, avoiding both overly granular disaggregation and excessive aggregation of information. The IPSASB is also seeking views on whether to allow a ‘mixed’ presentation of expenses by nature and by function in the statement of financial performance. |
|
No requirements for management-defined performance measures |
|
In IFRS 18, ‘management defined performance measures’ (MPMs) are subtotals of income and expenses (other than those that are specifically required to be presented or disclosed by IFRS Accounting Standards), which an entity uses in public communications outside of the financial statements to communicate management’s view of an aspect of the entity’s financial performance as a whole. IFRS 18 requires entities to provide disclosures about MPMs, including how the MPM was calculated and a reconciliation to the relevant subtotal required by accounting standards. The IPSASB does not propose to bring the IFRS 18 disclosure requirements on MPMs into the proposed new IPSAS, nor to adapt these MPMs requirements for the public sector. However, the IPSASB seeks feedback on whether there is a need for such requirements for public sector entities. |
Access the Consultation Paper and Illustrative Exposure Draft
The Consultation Paper explains the IPSASB’s proposals, set out as preliminary views.
The accompanying Illustrative Exposure Draft shows what the new IFRS 18-aligned IPSAS Standard could look like. The IPSASB will issue a formal Exposure Draft in the next stage of this project.
The IPSASB Consultation Paper and Illustrative Exposure Draft, together with the IPSASB’s summary of the proposals, are available on the IPSASB website, here.
We want to hear from you
We are interested in your feedback on the IPSASB proposals. In particular, we are interested in hearing your perspective on the following:
- The potential benefits of the proposed changes to presentation requirements and other proposals, as well as any potential costs or challenges;
- Whether any alternative presentation options for the primary financial statements – including options discussed but not proposed in the Consultation Paper – would work better than the proposed approaches;
- Whether disclosure requirements based on the IFRS 18 MPMs requirements would be useful for performance measures used by public sector entities, and if so, which types of performance measures should be covered;
- Any other comments on the proposals.
Your feedback will inform our submission to the IPSASB. Also, as PBE Standards in New Zealand for Tier 1 and Tier 2 PBEs are primarily based on IPSAS, your feedback will support the continued development of standards that support high-quality and consistent financial reporting for the New Zealand public and not-for-profit sectors.
Please note: This is the first phase of the IPSASB's project on presentation of financial statements, to be followed by an IPSASB Exposure Draft, and then a final IPSAS. After that, the XRB will consider whether to develop a PBE Standard based on the new IPSAS. We will consult on this separately at a later stage.
How to provide feedback
Comments to the XRB close on Friday, 17 July 2026.
You can also send your comments directly to the IPSASB, via their website, by Tuesday, 14 September 2026. If you do, sending a copy of your submission to the XRB via accounting@xrb.govt.nz would be appreciated.
All submissions will be published on the XRB website unless confidentiality is requested. If you object to the release of any information in your submission, please identify the specific parts and the reasons under the Official Information Act 1982. We reserve the right not to publish defamatory submissions. Submissions are subject to the Official Information Act 1982 and the Privacy Act 2020. The XRB will handle personal information in accordance with these Acts.