Targeted Review of the Accounting Standards Framework
In the latter half of 2019, the XRB conducted a Targeted Review of the New Zealand Accounting Standards Framework and issued a Discussion Paper to receive feedback.
Consultation closed on 15 November 2019.
In 2012 the XRB issued the New Zealand Accounting Standards Framework (the ASF), which sets out the XRB’s strategy for developing and issuing accounting standards for those entities who are required by legislation to prepare financial statements in accordance accounting standards issued by the XRB.
The ASF introduced a multi-sector, multi-standards, tiered approach to setting accounting standards in New Zealand and was issued in conjunction with the Government’s reforms to the financial reporting obligations of companies, registered charities, public sector entities (and other entities) through the enactment of the Financial Reporting Act 2013.
As of 2019, the ASF had been effective only for 4-5 years for most entities, so we considered it too soon to conduct a first-principles review of it.
Instead, we implemented a targeted review as we considered it timely and important for the XRB to still “check-in” on whether the ASF had been functioning as anticipated and was achieving its original objectives.
We wanted to understand how well the framework was working in practice and uncover any unintended consequences or new developments since the framework was first developed.
In this targeted review we were also seeking feedback on three specific matters:
- The importance of maintaining close alignment between Public Benefit Entity (PBE) Standards (for Not-for-profit and Public Sector entities) and International Public Sector Accounting Standards (IPSAS).
- The importance of harmonisation with Australia for Tier 2 for-profit disclosures.
- Do the PBE tier size criteria need to be revisited (for NFP and public sector entities)?
Since the end of the public consultation period, the XRB Board has analysed the submissions received and is still considering whether certain aspects of the ASF require refinement.
We will be issuing a position statement in due course on the outcomes of the targeted review.
Any refinements to the ASF would be issued for public consultation as a separate exposure draft. The XRB would also need to seek approval from the Minister of Commerce and Consumer Affairs for any amendments to the ASF.