NZASB Meeting 7 February 2018

Event Date 07 February

Date And Time

Location:
Level 7
50 Manners Street
Wellington

This event has already taken place.

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Here is a summary of the main matters considered:

Engagement with IPSASB Chair

Ian Carruthers, Chair of the International Public Sector Accounting Standards Board (IPSASB), attended the first half of the meeting. Ian provided an update on IPSASB projects and recent developments including the Proposed Strategy and Work Plan 2019–2023, Exposure Draft 63 Social Benefits and Exposure Draft 64 Leases.

Standard Approved for Issue

The Board approved for issue Annual Improvements to NZ IFRSs 2015–2017 Cycle which clarifies requirements in the following standards:

  • NZ IFRS 3 Business Combinations;
  • NZ IFRS 11 Joint Arrangements;
  • NZ IAS 12 Income Taxes; and
  • NZ IAS 23 Borrowing Costs.

The Board applied the Policy Approach to the Development of PBE Standards to the amending standard and, with the exception of the amendment to NZ IAS 12, agreed to wait for the IPSASB to consider these amendments.

In the case of the amendments to NZ IAS 12 the Board agreed to propose an equivalent amendments to PBE IAS 12 Income Taxes (in a future omnibus amending standard).

IPSASB ED 63 Social Benefits

The Board provided feedback on a draft comment letter on ED 63 Social Benefits. The Board will consider a revised comment letter at its meeting in March. Comments on the ED are due to the NZASB by 23 February 2018 and to the IPSASB by 31 March 2018.

Insurance

Subject to any concerns raised through consultation with key stakeholders, the Board agreed not to carry forward from Appendices C and D of NZ IFRS 4 Insurance Contracts the New Zealand-specific disclosures that are required by entities undertaking insurance activities.

These New Zealand-specific disclosures are either required by other NZ IFRSs, are required by regulation, or are no longer relevant.

The Board also decided to develop a PBE Standard based on IFRS 17 Insurance Contracts. In reaching this decision it noted that PBE IFRS 4 Insurance Contracts is based on NZ IFRS 4, which will be superseded by NZ IFRS 17 Insurance Contracts.

The Board also noted that the IPSASB does not have an equivalent standard on insurance and has no current plans to develop such a standard. Furthermore, IPSASB ED 63 Social Benefits proposes to permit an entity, in certain circumstances, to apply the insurance approach in IFRS 17 when accounting for certain social benefits.

IASB Materiality Practice Statement

The Board agreed to make IFRS Practice Statement 1 Management Commentary and IFRS Practice Statement 2 Making Materiality Judgements available to for-profits as non-mandatory guidance. 

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The Board also agreed that no changes were necessary to Explanatory Guide EG A7 Materiality for Public Benefit Entities.

Limited Scope Project – Tier 3 and Tier 4 PBE Accounting Requirements

The Board approved for issue ED NZASB 2018-2 2018 Omnibus Amendments to Tier 3 and Tier 4 PBE Accounting Requirements and its accompanying Invitation to Comment.

It is important to note that, at this time, the Board’s intention is to clarify existing requirements and to address minor issues only.

The Board is committed to undertaking a post-implementation review once the Tier 3 and Tier 4 standards have been in use for some time.

This will involve the Board looking at a number of things, including whether the objective of the standards has been achieved, whether the requirements are appropriate, whether any issues which need to be addressed have emerged since the standards were issued, and whether the costs of compliance are consistent with expectations.

The post-implementation review is planned for 2019-2020 and will give entities the opportunity to provide feedback on any issues or concerns with the Tier 3 and Tier 4 standards.

Guidance for Service Performance Reporting

The Board provided feedback on a preliminary draft of guidance being developed to assist smaller Tier 2 entities applying PBE FRS 48 Service Performance Reporting

Staff will continue to work on the guidance and report back to the Board periodically.

Next NZASB Meeting

Wednesday 21 March 2018 in Wellington.