New Accounting Standards and Interpretations for Public Benefit Entities. 31 March 2013

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1 New Accounting Standards and Interpretations for Public Benefit Entities 31 March 2013

2 Introduction his docu ent is applicable for Public Benefit Entities PBEs appl ing New ealand E ui alents to International inancial eporting Standards N I S his docu ent contains disclosure infor ation on changes in accounting polic on adoption of new and a ended N I S and N I Ss issued but not et effecti e his publication lists all applicable N I Ss issued as of 31 March 2013 and are applicable for PBEs with 31 March 2013 ear ends This document has two parts: Part A changes in accounting policy This table lists all the applicable accounting standards which would ha e been adopted for the first ti e for PBEs with a 31 March 2013 year end. Paragraph 28 of NZ IAS 8 Accounting Policies, Changes in Accounting Esti ates and Errors N IAS states that when an initial application of a standard has an effect on the current period, or any prior period, an entity shall disclose: a he title of the Standard b hen applicable that the change in accounting polic is made in accordance with the transitional provisions c he nature of the change in accounting polic d hen applicable a description of the transitional provisions e hen applicable the transitional pro isions that ight have an effect on future periods f or the current period and each prior period presented to the extent practicable, the amount of the adjustment: i or each financial state ent line ite affected ii If N IAS 33 Earnings per Share applies to the entit for basic and diluted earnings per share g he a ount of the ad ust ent relating to periods before those present, to the extent practicable h If retrospecti e application is i practicable for a particular prior period, or for the periods before those presented, the circumstances that led to the existence of that condition and a description of how and from when the change in accounting policy has been applied. Important note for public benefit entities In March 2011 the Accounting Standards e iew Board the predecessor bod to the E ternal eporting Board announced its decision to adopt a ulti standards approach to financial reporting in New ealand As a conse uence of this decision it was also decided that new and amended N I Ss issued after March 2011 would appl to profit oriented entities onl he tables below re ect this decision Ernst & Young New Accounting Standards and Interpretations for Public Benefit Entities 31 March

3 Part B accounting standards issued but not yet effective his table lists all applicable N I Ss issued but not et effecti e for PBEs with 31 March 2013 ear ends and assumes that the entity has elected not to early adopt any of these Standards/Interpretations. Paragraph 30 of N IAS re uires disclosure of the possible impact of new and revised Accounting Standards that have been issued but are not yet effective. PBEs that ualif for and appl differential reporting concessions are granted disclosure concessions in NZ IAS 8 and need not disclose information about standards issued but not yet effective. The table is complete as at 31 March 2013 and any further Standards/Interpretations issued after this date will also need to be disclosed up until the date of authorisation of the financial report An entity does not need to refer to Standards/ Interpretations that are not applicable to them provided the entity ensures that the Standard/Interpretation is, in fact, not relevant. If the effect of a particular Standard/ Interpretation has not yet been determined, those details should be disclosed. he i pact on roup financial state ents should be added based on the entit s specific circu stances This table will be updated and released for reporting periods ending 31 March, 30 June, 30 September and 31 December. Ernst & Young New Accounting Standards and Interpretations for Public Benefit Entities 31 March

4 Part A Changes in accounting policy The following standards and interpretations would have been applied for the first time for PBEs with years ending 31 March 2013 (unless early adopted): Reference N I S 1 N I S S Summary A end ents to N I S 1 First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards a e two changes to N I S 1 a he a end ents pro ide relief for first ti e adopters of N I Ss fro ha ing to reconstruct transactions that occurred before their date of transition to N I Ss b he a end ents pro ide guidance for entities e erging fro se ere h perin ation either to resu e presenting N I S financial state ents or to present N I S financial state ents for the first ti e A end ents to N I S Financial Instruments: Disclosures to N I S enhance the transparenc of disclosure re uire ents for the transfer of financial assets or transferred financial assets that are derecognised in their entiret but where the entit has a continuing in ol e ent in the the a end ents re uire disclosure of infor ation that enables users of financial state ents to e aluate the nature of and ris s associated with the entit s continuing in ol e ent in those derecognised assets. or transferred financial assets that are not derecognised in their entiret the a end ents re uire disclosure of infor ation that enables users of financial state ents to understand the relationship between those assets which are not derecognised and their associated liabilities. All the infor ation will need to be presented in a single note in an entit s financial state ents S New Zealand Additional Disclosures is a conse uence of the oint rans as an on ergence pro ect of the Australian Accounting Standards Board AASB and inancial eporting Standards Board SB his standard relocates New ealand specific disclosures fro other standards to one place and re ises disclosures in the following areas: a o pliance with N I S b he statutor basis or reporting fra ewor for financial state ents c Audit fees d I putation credits e econciliation of net operating cash ow to profit loss f Prospecti e financial state ents g Ele ents in the state ent of ser ice perfor ance of standard* for Group* 1 July April July April July April 2012 * Designates the beginning of the applicable annual reporting period unless otherwise stated. Ernst & Young New Accounting Standards and Interpretations for Public Benefit Entities 31 March

5 Reference Harmonisation Amendments NZ IAS 12 Amendments to NZ IAS 12 Income Taxes Deferred a eco er of Underlying Assets Summary A end ents to N I S to ar onise with I S and Australian Accounting Standards a e o e the disclosures which ha e been relocated to S b ar onise audit fee disclosure re uire ents in N IAS 1 with AASB 101 c ar onise i putation fran ing credits disclosure re uire ents in N IAS 12 with AASB 101 d Introduce of the option to use the indirect ethod of reporting cash ows in N IAS e Introduce an accounting polic choice to use the cost odel for in est ent propert under N IAS 0 f e o e the re uire ent to use an independent aluer and the related disclosure re uire ents currentl in N IAS 1 and N IAS 0 g e o e so e N specific disclosures These amendments update NZ IAS 12 to include: A rebuttable presumption that deferred tax on investment property measured using the fair value model in N IAS 0 should be deter ined on the basis that its carr ing a ount will be reco ered through sale This presumption is rebutted if the investment property is held within a business model whose objective is to consu e substantiall all of the econo ic benefits e bodied in the in est ent propert o er ti e rather than through sale A re uire ent that deferred ta on non depreciable assets easured using the re aluation odel in N IAS 1 should always be measured on a sale basis The amendments incorporate NZ SIC-21 Income Taxes Recovery of Revalued Non-Depreciable Assets into NZ IAS 12 for non-depreciable assets measured using the revaluation model in NZ IAS 16 Property, Plant and Equipment. of standard* for Group* 1 July April January April 2012 Ernst & Young New Accounting Standards and Interpretations for Public Benefit Entities 31 March

6 Part B Accounting standards issued but not yet effective The following standards and interpretations have been issued but are not yet effective for PBEs for the period ending 31 March Reference Title Summary N I S 200 Financial Instruments N I S 200 includes re uire ents for the classification and easure ent of financial assets resulting fro the first part of Phase 1 of the IASB s pro ect to replace N IAS 3 hese re uire ents i pro e and si plif the approach for classification and easure ent of financial assets co pared with the re uire ents of N IAS 3 The revised Standard introduces a number of changes to the accounting for financial assets the ost significant of which includes: wo categories for financial assets being a ortised cost or fair value e o al of the re uire ent to separate e bedded deri ati es in financial assets Strict re uire ents to deter ine which financial assets can be classified as a ortised cost or fair alue inancial assets can onl be classified as a ortised cost if a the contractual cash ows fro the instru ent represent principal and interest and b the entit s purpose for holding the instrument is to collect the contractual cash ows An option for in est ents in e uit instru ents which are not held for trading to recognise fair value changes through other comprehensive income with no i pair ent testing and no rec cling through profit or loss on derecognition eclassifications between a ortised cost and fair alue no longer per itted unless the entit s business odel for holding the asset changes Changes to the accounting and additional disclosures for e uit instru ents classified as fair alue through other comprehensive income of standard* Impact on Group financial statements for Group* 1 January April 2015 Ernst & Young New Accounting Standards and Interpretations for Public Benefit Entities 31 March

7 Reference Title Summary N I S 2010 Financial Instruments N I S 2010 supersedes N I S 200 he re uire ents for classif ing and easuring financial liabilities were added to N I S as issued in 200 he e isting N IAS 3 Financial Instruments: Recognition and Measurement re uire ents for the classification of financial liabilities and the abilit to use the fair alue option have been retained. However, where the fair value option is used for financial liabilities the change in fair alue is accounted for as follows: The change attributable to changes in credit risk are presented in other co prehensi e inco e I he re aining change is presented in profit or loss If this approach creates or enlarges an accounting mismatch in the profit or loss the effect of the changes in credit ris are also presented in profit or loss of standard* Impact on Group financial statements for Group* 1 January April 2015 Ernst & Young New Accounting Standards and Interpretations for Public Benefit Entities 31 March

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