NZASB Update 10/2019

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.

 

NZASB Meeting

Thursday 27 June 2019

NZASB icon

Applies to:


For-profitNot-for-profitPublic Sector


At this meeting the Board:

  • approved for issue PBE IPSAS 40 PBE Combinations;
  • approved for issue PBE IFRS 17 Insurance Contracts for application by not-for-profit PBEs only;
  • agreed that the public sector-specific issues raised by respondents to the exposure draft of PBE IFRS 17 need to be considered further before making PBE IFRS 17 applicable to public sector PBEs; and
  • provided feedback on a draft NZASB comment letter on the IPSASB Consultation Paper Measurement. A revised draft comment letter will return to the Board at its September 2019 meeting.

You can access the public agenda and meeting papers for this meeting on our website.

Have a look

The next NZASB meeting will be a half day meeting held on Wednesday 7 August 2019 in Wellington.


New PBE standard: PBE combinations

 Approved standard icon

Applies to:


Not-for-profitPublic Sector


Tier 1 and Tier 2

The NZASB has issued PBE IPSAS 40 PBE Combinations.

PBE IPSAS 40 sets out requirements for accounting for public benefit entity combinations (amalgamations and acquisitions). It supersedes PBE IFRS 3 Business Combinations.

PBE IPSAS 40 is effective for annual financial statements covering periods beginning on or after 1 January 2021, with early application permitted.

In general, it is to be applied prospectively to PBE combinations for which the amalgamation date or acquisition date is on or after 1 January 2021.

Have a look 


New PBE standard: Insurance contracts

(NOTE: applies to Not-for-profit PBEs only)

 Approved standard icon

Applies to:


Not-for-profit


Tier 1 and Tier 2

The NZASB has issued PBE IFRS 17 Insurance Contracts for application by Tier 1 and Tier 2 not-for-profit PBEs.

PBE IFRS 17 is effective for annual periods beginning on or after 1 January 2022, with early application permitted. This Standard is not applicable to public sector PBEs.

The recognition, measurement, presentation and disclosure requirements of the Standard are aligned with the requirements in NZ IFRS 17 Insurance Contracts. Therefore, licensed insurers that are not-for-profit PBEs will apply the same requirements for insurance contracts as for-profit licensed insurers applying NZ IFRS 17.

The NZASB has commenced a project to explore public sector-specific issues raised by respondents to the exposure draft of PBE IFRS 17. Until this project is completed, PBE IFRS 4 Insurance Contracts will continue to be applicable to public sector PBEs.

We urge not-for-profit PBEs that issue insurance contracts to begin implementation of PBE IFRS 17 as soon as possible.

Have a look


Upcoming proposed amendments

The IASB has recently issued for comment proposed amendments to IFRS 17 Insurance Contracts (see next article). These minor amendments seek to address concerns arising from the implementation of IFRS 17. Many of these proposed amendments are also expected to be applicable to PBE IFRS 17. Therefore, the NZASB will shortly be seeking comments from Tier 1 and Tier 2 not-for-profit PBEs on these proposals. 

To ensure not-for-profit PBEs have sufficient time to implement PBE IFRS 17, it was decided that PBE IFRS 17 should be issued before waiting for the amendments to IFRS 17 to be finalised.

These amendments are not expected to unduly disrupt the implementation of IFRS 17. Therefore, not-for-profit PBEs should not wait for these amendments to be finalised before beginning their implementation of PBE IFRS 17.


IASB proposes amendments to IFRS 17 Insurance Contracts including deferral of effective date

 IASB-ED-2019-4 cover

Applies to:


For-profit


 Stakeholders have raised concerns with the implementation of IFRS 17 Insurance Contracts. To address some of these matters, the IASB has issued an exposure draft (ED) of proposed amendments to IFRS 17 (ED/2019/4 Amendments to IFRS 17). These proposals are not expected to unduly disrupt the implementation of IFRS 17 which is already underway.

Proposed amendments in the ED seek to:

  • defer the effective date of IFRS 17 from 1 January 2021 to 1 January 2022;
  • provide more scope exclusions;
  • reduce accounting mismatches from reinsurance;
  • add additional transition relief; and
  • address other matters.

Comments are due to the NZASB by 26 August 2019, and the IASB by 25 September 2019.

Have a look


Update on Incorporated Societies review

inc. image

MBIE1 has confirmed that the proposals for the new Incorporated Societies legislation have been approved by Cabinet. Some proposals of interest are summarised below.

Incorporated Societies not registered as Charities will be required to report using XRB standards when they satisfy one or more of the following criteria:

  • annual payments of $10,000 or more;
  • assets of $30,000 or more; or
  • “Donee status” under the Income Tax Act 2007.

A mandatory audit is required for Incorporated Societies not registered as Charities2 which satisfy one of the following criteria:

  • annual expenditure over $2 million; or
  • assets over $4 million.

All incorporated societies will transition into the new regime over a 2½ year period.

All incorporated societies will need to re-register under the new Act (as opposed to an automatic transfer of all current Incorporated Societies which was also considered).

The Incorporated Societies Bill is expected to be introduced to Parliament later this year.

The Companies Office and MBIE will be:

  • enhancing the Register of Incorporated Societies; and
  • undertaking an education campaign about the new Incorporated Societies regime.

More details here


1.   Ministry of Business, Innovation and Employment.

2.    A registered charity is required to have a mandatory audit when annual expenditure is over $1 million and a mandatory review when annual expenditure is over $500,000.


Have your say...

Have your say icon

Before issuing a finalised accounting standard the NZASB and the international standard-setting boards, the IASB and the IPSASB, issue consultation documents. These documents seek your feedback on proposals that could potentially affect you. 

We are currently consulting on the matters set out in the tables below.  

Tell us how these changes could affect your entity or the entities you work with. 

We welcome your comments and feedback, either formal or informal, by the due dates below.

You can submit your comments directly from the Exposure Draft page on our website following the links below. 


IASB and IFRS Foundation Consultation Documents 


For-profit



 

IPSASB Consultation Documents 


Not-for-profitPublic Sector



 

NZASB Consultation Documents


For-profitNot-for-profitPublic Sector



This NZASB Update is intended to provide subscribers with a summary of the recent activities of the New Zealand Accounting Standards Board (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.


This NZASB Update refers to the work of the International Accounting Standards Board (IASB) and the International Public Sector Accounting Standards Board (IPSASB) and uses registered trademarks of the IFRS Foundation (for example, IFRS® Standards, IFRIC® Interpretations and IASB® papers).