NZASB Meeting 1 November 2017
Date And Time
50 Manners Street
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Here is a summary of the main matters considered:
Standards Approved for Issue
The NZASB approved the following standards to be finalised and issued:
- PBE FRS 48 Service Performance Reporting;
- 2017 Omnibus Amendments to NZ IFRS; and
- Prepayment Features with Negative Compensation (Amendments to NZ IFRS 9).
We will advise by a separate communiqué when we issue these standards.
Accounting for Revenue and Non-Exchange Expenses
The NZASB considered chapters 6–7 of the International Public Sector Accounting Standards Board (IPSASB) Consultation Paper Accounting for Revenue and Non-Exchange Expenses (the CP) and discussed matters to include in its draft comment letter on the CP.
The Board agreed that for the recognition of non-exchange expenses, the first question to ask is whether there is a present obligation to incur that expenditure. This involves determining if and when an obligating event has occurred (i.e. to determine when a liability is recognised).
There is guidance on determining if and when an obligating event has occurred in IPSAS 19 Provisions, Contingent Liabilities and Contingent Assets and the IPSASB’s Conceptual Framework.
The second question after a liability is recognised, is what is the corresponding debit entry, an expense or an asset, which depends on a number of factors.
The Board discussed the wide spectrum of non-exchange expense transactions in the public sector and not-for-profit sector, including public sector services (e.g. health and education) and grants of funding to other parties for the provision of goods or services to beneficiaries.
At the next meeting on 24 November, the Board will review the complete draft comment letter on the CP.
Comments on the CP are due to the NZASB by 22 November 2017 and to the IPSASB by 15 January 2018.
IPSASB ED 62 Financial Instruments
The NZASB provided feedback on a draft comment letter on IPSASB ED 62 Financial Instruments. The Board will consider a revised comment letter at its meeting in December. Comments on the ED are due to the NZASB by 13 November 2017 and to the IPSASB by 31 December 2017.
FRS-42 Prospective Financial Statements
The NZASB considered ED NZASB 2017-3 Proposed Amendments to the Scope of FRS-42 and the accompanying Invitation to Comment, and approved it for issue, subject to the changes agreed at the meeting.
We will advise by a separate communiqué when we issue this exposure draft.
Application of the Public Benefit Entity (PBE) Policy Approach
The NZASB applied the Policy Approach to the Development of PBE Standards to Prepayment Features with Negative Compensation (Amendments to NZ IFRS 9) and agreed to wait for the IPSASB to consider the incorporation of these amendments into IPSASs.
Interests in Other Entities: EG A8 and EG A9
The Board agreed to reissue updated versions of:
- Explanatory Guide A8 Financial Reporting by Not-for-profit Entities: The Reporting Entity (EG A8); and
- Explanatory Guide A9 Financial Reporting by Not-for-profit Entities: Identifying Relationships for Financial Reporting Purposes (EG A9).
Forthcoming NZASB Meetings
- Friday 24 November 9am-12pm(via videoconference and teleconference) to discuss IPSASB CP Accounting for Revenue and Non-Exchange Expenses.
- Thursday 14 December 2017 in Wellington.