Changes to For-Profit and PBE Accounting Standards for the Period June 2011 to May 2017

Transcription

1 Changes to For-Profit an Accounting Stanars for the Perio June 2011 to May 2017 The purpose of this table is to maintain a atabase of all the changes to the for-profit an accounting s since June 2011, an to provie users with a short explanation of the effect of the change. With the move to a multi-sector, multi-tier accounting s framework we hope this resource will be useful to entities monitoring their financial reporting requirements. s Entities esignate as s (Public Benefit Entities) for financial reporting nee to familiarise themselves with changes to s only in the table below an can isregar changes to NZ IFRS for for-profit entities (shae items). For-profit entities Entities esignate as for-profit for financial reporting nee to familiarise themselves with both changes to NZ IFRS an s. For-profit entities will sometimes nee to ajust their CFISnet scheules for group reporting purposes to ensure they comply with Crown accounting policies an s. We refer to this situation as a mixe group reporting issue. The mixe group reporting issue The FSG reporting entity is a mixe group. Mixe groups are groups that are heae by a that is require to consoli one or more for-profit entities when preparing its group financial statements. In New Zealan, for-profit entities report using NZ IFRS, an s report using s (which are mainly base on International Public Sector Accounting Stanars (IPSASs)). In many cases the requirements in the NZ IFRS suite of s an the suite of s are the same. However, where the s an NZ IFRS s iffer, an the impact of the ifference is material, for-profit entities within the FSG may nee to report to the Crown for FSG consoliation purposes on a ifferent basis from the one they woul use to prepare their separate financial statements. This is to ensure that entities submissions for consoliation in the Financial Statements of the Government comply with Crown Accounting Policies. For-profit subsiiaries nee to remain vigilant when making changes to their iniviual accounting policies (particularly when early aopting amenments to s) to etermine whether they still align with Crown accounting policies. June 2017 up: There are some changes in accounting s that are effective in the 2016/17 year. For the relevant changes refer to NZASB nos. 60, 61, 64, 65 an 66 in the table below. These changes are generally clarifications in s an any impact as a result of these clarifications epens on the accounting policy that has been applie previously if these events or transactions previously occur. In our view, there is unlikely to be anything in these changes that will have a material impact on the Financial Statements of the Government. The clarifications in these s have not resulte in any change to the Crown accounting policies. There has been a number of new s issue in the last year with effective s after 2016/17. The ecision about whether they are aopte early in Crown accounting policies is consiere on a case by case basis (refer to NZASB nos an in the table below). The two most significant s changes uring the year are IFRS 9 Financial Instruments an Interest in Other Entities. IFRS 9 Financial Instruments: We plan to early aopt IFRS 9 for the Financial Statements of the Government in 2018/19. This means that the material impacts of the change as a result of aopting IFRS 9 will nee to be reflecte in Buget 2018 fiscal forecasts. Early aoption of IFRS 9 in 2018/19 woul mean that there woul be alignment with the that for-profit entities must aopt NZ IFRS 9. If aoption s are aligne, no mixe group reporting issues woul arise from 2018/19. The level of impact for s in aopting IFRS 9 will epen on the type an level of financial instruments hel by s. IFRS Interest in Other Entities: We o not plan to early aopt IPSAS for the Financial Statements of the Government. The Crown accounting policy for accounting for interests in other entities continues to be base on IPSAS 6-8. The new s must be applie by 2019/2020. For-profit entities that have ha changes in their group structures an applie NZ IAS 27, 28, NZ IFRS to etermine the accounting treatment, may nee to check that the treatment is consistent with the requirements in IPSAS 6 8 an Crown accounting policies. Any ajustments to CFISnet scheules to ensure compliance with IPSAS 6-8 will only nee to be mae until IPSAS are aopte in the Financial Statements of the Government. NZASB / 88 May-17 IPSAS 39 Employee Benefits IPSAS 39 is substantially converge with IAS 19 Employee Benefits as amene by the IASB in June 2011 (an by the NZASB in NZ IAS 19 in August refer to NZASB 1 below). IPSAS 39 replaces IPSAS 25 Employee Benefits, which is base on IAS 19 as issue in The main changes mae to NZ IAS 19 in 2011 by the IASB/NZASB were regaring the requirements an isclosures aroun efine benefit plans. The IASB (an NZASB) i not unertake a funamental review of all the requirements in IAS 19/NZ IAS 19 in The main ifferences between IPSAS 39 an IPSAS 25 are: Removal of an option that allowe an entity to efer the recognition of changes in the net efine benefit liability (the corrior approach ); Introuction of the net interest approach for efine benefit plans; Amenment of certain isclosure requirements for efine benefit plans an multi-employer plans; Simplification of the requirements for contributions from employees or thir parties to a efine benefit plan when those contributions are applie to a simple contributory plan that is linke to service; an Removal of the requirements for Composite Social Security Programs. The first four changes above reflect those mae by the International Accounting Stanars Boar to its equivalent IAS 19, up to December The fifth change, removal of the Composite Social Security Programs section, reflects the IPSASB s conclusion that the section was unnecessary in practice. Jan-2019 This will have an impact on the way the Government Superannuation Fun (GSF) efine benefit pension liability is presente in financial statements. This will not be early aopte for the 2016/17 Financial Statements of the Government. A ecision about whether this will be early aopte in the 2017/18 year will be mae at a later. Until IPSAS 39 is aopte in the Crown accounting policies there will be a ifference between the reporting for forprofits an s. However, as the most significant change relate to efine benefit pension schemes, we anticipate that it will not result in a material mixe group reporting issue because of the limite number of efine benefits schemes left in the sector. Treasury: v7 1

2 / 87 May-17 Approve Buget (Amenments to IPSAS 1) The amenments remove the reference to an approve buget in IPSAS 1, Presentation of Financial Statements because this term is not normally use by New Zealan s. The amenment refers preparers to the comparative requirements in the an proposes that if comparatives between prospective general purpose financial statements an historical financial statements are require, such comparisons can be presente either on the face of the financial statements or in the notes. Jan-2018 This amenment is effectively clarifying current public sector practice, so there is no impact on the Crown s accounting policy. 86 Mar-17 Impairment of Revalue Assets (Amenments to IPSASs 21 an 26) These amenments aress an issue regaring the lack of clarity about whether an entire class of assets nees to be nees to be revalue when an iniviual asset in that class of assets, all if which have been revalue, is impaire. Jan-2018 This amenment brings revalue property, plant an equipment an intangible assets into the scope of the impairment s. It is likely that s have alreay been effectively applying this requirement through their revaluations processes. This change clarifies that in the event of an impairment event between revaluation cycles (e.g. an earthquake), an impairment expense can be recognise for an iniviual revalue asset without triggering a revaluation of the class of assets to which the iniviual asset belongs. However, with this clarification, entities, with revalue assets that are impaire, will nee to assess whether there are any aitional isclosure requirements in the impairment s that they nee to comply with. (For-profit entities have accounte for revaluations on property plant an equipment an intangible assets on an iniviual asset basis since NZ IFRS was aopte in 2007/08. For-profit entities nee to continue to ajust their CFISnet scheules to align with Crown accounting policy where revaluations are reporte on a class of asset basis). 85 Feb-17 Annual Improvements to NZ IFRSs Cycle NZ IFRS 1: NZ IFRS 12: Jan-17 These changes are limite scope amenments to be applie by for-profit entities an not expecte to result in material impacts or give rise to a significant mixe group reporting issue. NZ IAS Feb-17 NZ IFRIC Interpretation 22 Foreign Currency Transactions an Avance Consieration NZ IFRIC 22 provies requirements about which exchange rate to use in reporting foreign currency transactions (such as revenue transactions) when payment is mae or receive in avance. The IFRIC consensus is that the of recognition of a non-monetary asset or liability with an avance receipt or payment is mae is the of the transaction to etermine the exchange rate. The impact of this clarification is not expecte to be material for for-profit entities an therefore not expecte to give rise to a significant mixe group reporting issue. 83 Feb-17 Transfers of Investment Property (Amenments to NZ IAS 40) The amenments to NZ IAS 40 clarify the requirements on transfers to, or from, investment property, pertaining to when there is a change in use of a property supporte by evience. The impact of this clarification is not expecte to be material for for-profit entities an therefore not expecte to give rise to a significant mixe group reporting issue. Treasury: v7 2

3 / 82 Dec-16 IFRS 9 Financial instruments IFRS 9 replaces IPSAS 29 Financial Instruments: Recognition an Measurement The changes in IFRS 9 compare to the previous (IAS 39) are significant. The three main changes are: new methoology for financial instruments classification replacing the incurre loss impairment moel with a more forwar-looking expecte loss moel, an new requirements on hege accounting In eveloping IFRS 9 the NZASB: (a) carrie forwar the moifications mae by the IPSASB when it evelope IPSAS 29, to the extent that these moifications continue to be appropriate, an (b) mae limite changes to the requirement of IFRS 9 an the consequential amenments arising from IFRS 9, to ensure the coherence of the suite of Stanars. Jan-21 We plan to early aopt IFRS 9 for the Financial Statements of the Government in 2018/19. This means that the material impacts of the change to IFRS 9 will nee to be reflecte in Buget 2018 fiscal forecasts. This woul mean that there woul be alignment with the that for-profit entities must aopt NZ IFRS 9. If aoption s are aligne, no mixe group reporting issues woul arise (unless a forprofit entity has alreay early aopte NZ IFRS 9 for their own financial reporting). The level of impact for s in aopting IFRS 9 will epen on the type an level of financial instruments hel by s. One of the most significant changes in IFRS 9 is the change in classification of financial assets, such as loans. For example, loans with contingent repayment features that are currently classifie as amortise cost may be require to be classifie as loans measure at fair value uner IFRS 9. An example of a loan portfolio with contingent repayment features is stuent loans. There are also significant changes to the impairment requirements uner IFRS 9 which entities will nee to assess for possible impacts. 81 Dec-16 IPSAS 38 Disclosure of Interests in Other Entities Jan-19 Refer to NZASB approval no. 78 below. IPSAS 38 brings together the isclosures previously inclue in IPSASs 6 8. It also introuces new isclosure requirements, incluing those relate to structure entities that are not consoli an controlling interests acquire with the intention of isposal. IPSAS 38 aligns with NZ IFRS Dec-16 IPSAS 37 Joint Arrangements Jan-19 Refer to NZASB approval no. 78 below. IPSAS 37 replaces IPSAS 8. IPSAS 37 is the same as IPSAS 37 an aligns with NZ IFRS 11. IPSAS 37 establishes requirements for classifying joint arrangements an accounting for those ifferent types of joint arrangements. Joint arrangements are classifie as either joint operations or joint ventures. In a joint operation, the parties to the arrangement have rights to the assets an obligations for the liabilities relating to the arrangement. In a joint venture, the parties to the arrangement have rights to the net assets of the arrangement. These classifications iffer from IPSAS 8, which referre to three types of arrangements (jointly controlle entities, jointly controlle operations, an jointly controlle assets). IPSAS 37 requires that an entity account for its interest in a joint operation by recognizing its share of the assets, liabilities, revenue, an expenses of the joint arrangement. It also requires that joint ventures be accounte for using the equity metho. Previously, IPSAS 8 permitte jointly controlle entities to be accounte for using either the equity metho or proportionate consoliation. Refer NZASB 78 below for a iscussion of the project Interest in Other Entities 79 Dec-16 IPSAS 36 Investments in Associates an Joint Ventures Jan-19 Refer to NZASB approval no. 78 below. IPSAS 36 replaces IPSAS 7. IPSAS 36 is the same as IPSAS 7 an aligns with NZ IAS 28. IPSAS 36 explains the of the equity metho of accounting, which is use to account for investments in associates an joint ventures. The requirements are very similar to the current guiance in IPSAS 7. Because equity accounting must now be use when accounting for joint ventures, the title of the now also refers to joint ventures. In contrast with IPSAS 7, IPSAS 36 oes not permit a ifferent accounting treatment for temporary investments. Refer NZASB 78 below for a iscussion of the project Interest in Other Entities Treasury: v7 3

4 / 78 Dec-16 IPSAS 35 Consoli Financial Statements IPSAS 34, 35, 36, 37 an 38 ( IPSAS 34-38) referre to collectively as Interest in Other Entities replaces IPSAS6-8. The IPSASB issue the s liste in the table to converge with the IASB s s liste in the same table. Jan-19 We o not plan to early aopt IPSAS for the Financial Statements of the Government. The Crown accounting policy for accounting for interests in other entities continues to be base on IPSAS 6-8. The new s must be applie by 2019/2020. IPSAS 35 supersees the requirements in IPSAS 6 regaring consoli financial statements. IPSAS 35 is base on IFRS 10. If the of NZ IAS 27, 28, NZ IFRS by for-profit entities brings about a change in the assessment about accounting for interest in other entities that is ifferent from the assessment in current s IPSAS 6 8, for profit entities will nee to ajust their CFISnet scheules to ensure they comply with Crown accounting policies an s IPSAS 6-8. These ajustments will continue to be neee until IPSAS are aopte in the Financial Statements of the Government. IPSAS 35 still requires that control be assesse having regar to benefits an power, but the efinition of control has change an the now provies consierably more guiance on assessing control. The efinition of control focuses on an entity s ability to influence the nature an amount of benefits through its power over another entity. This new efinition of control may impact previous assessments of control, an therefore whether certain entities shoul be consoli. IPSAS 35 introuces the concept of investment entities, which may be applicable to some sovereign wealth funs. Generally, an investment entity measures its investments in controlle entities at fair value through surplus or eficit. After thorough consultation, the IPSASB ecie, for public sector specific reasons, that an entity which controls an investment entity shoul retain this metho of accounting for an investment entity s investments in its consoli financial statements, regarless of whether it is itself an investment entity. In contrast with IPSAS 6, IPSAS 35 no longer permits an exemption from consoliation for temporarily controlle entities. Consistent with the IPSASB s policy of reucing unnecessary ifferences between IPSASs an Government Finance Statistics reporting guielines, the IPSASB has aligne the principles in IPSAS 35 with the Government Finance Statistics Manual 2014 (pre-publication raft) where feasible. The NZASB moifie IPSASs to make them suitable for the New Zealan environment by: (a) aing not-for-profit (NFP) enhancements to ensure that the s are appropriate for by NFP public benefit entities (s) as well as public sector s; (b) making changes to ensure coherence within the s. For example, the existence of IFRS 3 Business Combinations means that some aitional guiance has been inclue in the s such as accounting for the acquisition of an interest in a joint operation that constitutes a business as efine in IFRS 3; an (c) aing guiance on: (i) assessing control when there is preetermination of activities; (ii) network an partner agreements (base on the franchise guiance in IFRS 10); an (iii) mixe groups (base on guiance in IPSAS 6). 77 Dec-16 IPSAS 34 Separate Financial Statements Jan-19 Refer to NZASB approval no. 78 above. IPSAS 34 replaces IPSAS 6. IPSAS 34 is the same as IPSAS 34 an aligns with IAS 27. The requirements for separate financial statements in IPSAS 34 are very similar to the current requirements for separate financial statements in IPSAS 6. Refer NZASB 78 above for a iscussion of the project Interest in Other Entities Treasury: v7 4

5 / 76 Dec Omnibus Amenments to Stanars Part C: Jan-17 Part D Bearer Plants: Jan 2018, Remaining Part D an all of Part D: Jan 2017, The amenments apply to entities. The amenments to IPSAS 17 an IPSAS 27 for bearer plants now aligns with the same IASB an NZASB amenments to NZ IAS 16 an NZ IAS 41 (refer to NZASB approval 45 below). As a result of the change in s, a previous accounting ifference an mixe group issue in relation to accounting for bearer plants has been eliminate. The Crown s accounting policies will nee to be up as a result of this change in accounting for bearer plants. The other amenments in the omnibus are generally clarifications of existing s, so will not have an impact of the Crown s accounting policies. Any impact in an entity s iniviual financial statements as a result of these clarifications epens on the accounting policy that has been applie previously (if these events or transactions occur). 75 Nov-16 Reuce Disclosure Regime (RDR) Expecte Creit Losses (Amenments to NZ IFRS 7) This Stanar provies isclosure concessions for Tier 2 for-profit entities applying NZ IFRS 7 Financial Instruments: Disclosures as amene by NZ IFRS 9 Financial Instruments (as issue in 2014). This amenment may affect isclosures in an entity s iniviual financial statements if they are a Tier 2 reporting entity but has no implications for that entity s CFISnet scheules for the Financial Statements of the Government. 74 Nov-16 Applying NZ IFRS 9 Financial Instruments with NZ IFRS 4 Insurance Contracts (Amenments to NZ IFRS 4) The amenments to NZ IFRS 4 aress issues arising from the ifferent effective s of NZ IFRS 9 an the forth coming insurance contracts s. The amenments may be applie by for-profit entities that issue insurance contracts other than those that apply Appenix C Life Insurance Entities an Appenix D Financial Reporting of Insurance Activities of NZ IFRS 4. The amenments permit eligible entities to: This amenment applies to for-profit entities that issue insurance contracts other than those that apply Appenix C Life Insurance Entities an Appenix D Financial Reporting of Insurance Activities of NZ IFRS 4. (a) apply the overlay approach that involves applying NZ IFRS 9 an also applying NZ IAS 39 Financial Instruments: Recognition an Measurement to eligible financial assets to calculate a single line item ajustment to profit or loss so that the overall impact on profit or loss is the same as if NZ IAS 39 ha been applie; or (b) temporarily efer NZ IFRS 9 (the eferral approach) when their activities are preominantly connecte with insurance, provie they make aitional isclosures to enable users to make comparisons with insurers applying NZ IFRS 9. Entities may continue to apply NZ IAS 39 for annual reporting perios beginning before 1 January Treasury: v7 5

6 / 73 Aug-16 Classification an Measurement of Share-base Payment Transactions (Amenments to NZ IFRS 2) The amenments to NZ IFRS 2 Share-base Payment, which were evelope through the IFRS Interpretations Committee, clarify the accounting for: (a) the effects of vesting an non-vesting conitions on the measurement of cash-settle share-base payments; This amenment applies to for-profit entities that have share-base payment transactions in its financial statements, incluing transactions with employees or other parties to be settle in cash, other assets or equity instruments of the entity. (b) the classification of share-base payment transactions with a net settlement feature for withholing tax obligations; an (c) a moification to the terms an conitions of a share-base payment that changes the classification of the transaction from cash-settle to equity-settle. The accounting suite oes not inclue an equivalent of NZ IFRS 2 but it is use as authoritative support in eveloping Crown accounting policy. Therefore, any changes in implementing the amenment to NZ IFRS 2 woul flow unajuste in the CFISnet scheules for the Financial Statements of the Government. 72 May-16 of the Public Benefit Entities Conceptual Framework This Public Benefit Entities Conceptual Framework has been issue as a result of a new international public sector conceptual framework. The framework establishes the concepts that the NZASB applies in eveloping Public Benefit Entity Stanars ( Stanars). Jan-17 The Conceptual Framework is an authoritative notice an not an accounting. As a result, there is no change to the Crown s accounting policy. 71 May-16 Clarifications to NZ IFRS 15 Revenue from Contract with Customers The amenments are technical in nature an clarify the following issues: (a) The concept of istinct goos or services for the purpose of ientifying a performance obligation in a contract (an amenment to the boy of NZ IFRS 15); (b) How to assess control for the purpose of etermining whether an entity is a principal or an agent (an amenment to the Application Guiance); an (c) Determining whether revenue from granting a licence shoul be recognise at a point in time, or over time (an amenment to the Application Guiance). When NZ IFRS 15 is aopte This amenment applies to for-profit entities. Any impact on for-profit entities will epen on the revenue accounting policy that has been applie previously. The accounting suite oes not inclue an equivalent of NZ IFRS 15, so Crown accounting policy is still base on IPSAS 9 (largely base on NZ IAS 18) an IPSAS 11 (largely base on NZ IAS 11). In aition, two practical expeients are introuce for moifie contracts an complete contracts to reuce the cost an complexity for entities transitioning to IFRS 15. A for-profit entity who aopts NZ IFRS 15 will nee to assess whether any changes in their revenue accounting policy are compliant with Crown accounting policies an may nee to ajust its CFISnet scheules in the event they are not (taking into account the materiality of those changes). 70 May-16 Disclosure Initiative (Amenments to NZ IAS 7) This amenment introuces a reconciliation of net ebt an aitional isclosure requirements about restrictions on an entity s liquiity as a result of the Disclosure Initiative project unertaken by the IASB Jan-17 This amenment may affect isclosures in an entity s iniviual financial statements but has no implications for that entity s CFISnet scheules for the Financial Statements of the Government. 69 Mar-16 Recognition of Deferre Tax Assets for Unrealise Losses (Amenments to NZ IAS 12) This amenment clarifies the recognition of a eferre tax asset that is relate to a ebt instrument measure at fair when certain conitions apply Jan-17 While this amenment is applicable to forprofit entities, the same change was subsequently mae to IFRS 12 for s (refer NZASB approval 76 above). Any forprofit entity impacts as a result of these amenments woul flow unajuste to CFISnet scheules for the Financial Statements of the Government. 68 Feb-16 Leases (NZ IFRS 16) The new eliminates the classification of leases as either operating (off balance sheet) or finance leases (on balance sheet). Instea, for virtually all lease contracts (except for short-term leases of lowvalue assets) the lessee recognises a lease liability reflecting future lease payments an a right-of-use asset. In the operating statement, lessees recognise interest expense on the lease liability an a epreciation charge on the right-of-use asset. In the cash flow, the parts of the lease payments that reflect the repayment of the principal portion of the lease liability will be inclue in financing activities. Jan-19 only if applying NZ IFRS 15 Revenue at the same time A for-profit entity who aopts NZ IFRS 16 will nee to ajust its CFISnet scheules to ensure they comply with Crown policy an IPSAS Feb-16 of Amenment to NZ IFRS 10 an NZ IAS 28 These amenments efer the manatory effective of amenments to NZ IFRS 10 an NZ IAS 28 Sale or Contribution of Assets between an Investor an its Associate or Joint Venture as per approval 54 below. The effective is eferre from 1 January 2016 to 1 January Jan-20 This is an amenment to the only. Treasury: v7 6

7 / 66 Dec-15 Donate Goos (Amenments to IPSAS 23) This amens IPSAS 23 Revenue from Non-Exchange Transactions applie by Tier 1 an Tier 2 s as a consequence of issues ientifie by the charities sector. Entities o not nee to recognise goos in-kin at the of acquisition if these onate goos meet the efinition of inventories in IPSAS 12 Inventories, an it is not practicable to measure reliably the fair value of those goos at the of acquisition. This amenment only applies to inventories. This coul impact some Government reporting entities, but expecte to mainly impact charities that operate Op shops an foo banks. In the case where goos in-kin are sol, the entity recognises revenue when they are sol. In the case where goos-kin are istribute free of charge, the entity oes not recognise revenue. 65 Dec-15 Amenments to Simple Format Reporting Accounting Requirements as a Consequence of XRB A1 This amens the terminology in the Simple Format Reporting requirements applie by Tier 3 an Tier 4 s as a consequence of the issuance of XRB A1 Application of the Accounting Stanars Framework. As these amenments in the s are largely eitorial we o not expect any changes in practice. Applies to Tier 3 an Tier 4 s only. 64 Dec-15 Amenments to Stanars an Authoritative Notice as a Consequence of XRB A1 an Other Amenments This amens the Stanars applie by Tier 1 an Tier 2 s as a consequence of the issuance of XRB A1 Application of the Accounting Stanars Framework. Amenments are mae to align efinitions an clarify the assertions of compliance to be mae by Tier 1 an Tier 2 s. As these amenments in the s are largely eitorial we o not expect any changes in practice. Applies to Tier 1 an Tier 2 s only. 63 Dec-15 Amenments to For-profit Accounting Stanars as a Consequence of XRB A1 an Other Amenments This amens the Stanars applie by Tier 1 an Tier 2 for-profit entities as a consequence of the issuance of XRB A1 Application of the Accounting Stanars Framework. Amenments are mae to align efinitions an clarify the assertions of compliance to be mae by Tier 1 an Tier 2 for-profit entities. As these amenments in the s are largely eitorial we o not expect any changes in practice. 62 Nov-15 of NZ IFRS 15 The effective of NZ IFRS 15 Revenue from Contracts with Customers has move from 1 January 2017 to 1 January This is an amenment to the manatory only. 61 Jul-15 Disclosure Initiative (Amenments to IPSAS 1) These amenments are base on the IASB Disclosure Initiative (Amenments to IAS 1), as per approval 59. These narrow-scope amenments clarify, rather than significantly change existing IPSAS 1 requirements. The amenments are esigne to further encourage entities to apply professional jugement in etermining what information to isclose in their financial statements. The amenments relate to materiality, orer of the notes, subtotals, accounting policies an isaggregation. This amenment may affect the level of isclosures in an entity s iniviual financial statements but has no implications for that entity s CFISnet scheules for the Financial Statements of the Government. This amenment has effectively aligne NZ IFRSs an Stanars. Treasury: v7 7

8 / 60 Jul Omnibus Amenments to Stanars The following amenments are to align the Stanars with NZ IFRSs as a consequence of the IASB s Annual Improvements to IFRSs: Stanar IPSAS 16 Investment Property Amenment Clarifies the interrelationship between IFRS 3 Business Combinations an IPSAS 16 Investment Property when classifying property as investment property or owner occupie property. is only permitte for not-forprofit s. Any impact as a result of these clarifications epens on the accounting policy that has been applie previously if these events or transactions occur. These amenments have effectively aligne NZ IFRSs an Stanars, so have eliminate the previous mixe-group ifferences. IPSAS 20 Relate Party Disclosures Aligns with NZ IAS 40 Investment Property (approval 36). Clarifies that an entity proviing key management personnel services to the reporting entity or to the parent of the reporting entity is a relate party of the reporting entity. IFRS 3 Business Combinations Aligns with NZ IAS 24 Relate Party Disclosures (approval 34). Clarifies that contingent consieration that is classifie as an asset or liability shall be measure at fair value at each reporting. There are consequential amenments to IPSAS 29 Financial Instruments: Recognition an Measurement an IPSAS 19 Provisions, Contingent Liabilities an Contingent Assets. Aligns with NZ IFRS 3 Business Combinations (approval 34). IFRS 5 Non-current Assets Hel for Sale an Discontinue Operations Clarifies that when an entity reclassifies an asset from hel for sale to hel for istribution to owners or vice versa, that the change in classification shoul be treate as a continuation of the original plan of isposal. It also clarifies that an entity shoul cease to apply hel-foristribution accounting in the same way as it ceases to apply the helfor-sale accounting when it no longer meets the hel-for-sale criteria. Aligns with NZ IFRS 5 Non-current Assets Hel for Sale an Discontinue Operations (approval 55). IAS 34 Interim Financial Reporting Clarifies that the require interim isclosures must either be in the interim financial statements or incorporate by cross-reference between the interim financial statements an wherever they are inclue within the interim financial report (e.g., in the management commentary or risk report). The other information within the interim financial report must be available to users on the same terms as the interim financial statements an at the same time. Aligns with NZ IAS 34 Interim Financial Reporting (approval 55). The following amenments are to align the Stanars with IPSASs as a consequence of the IPSASB s Improvements to IPSASs 2014: Stanar IPSAS 1 Presentation of Financial Statements IPSAS 17 Property, Plant an Equipment IPSAS 28 Financial Instruments: Presentation Amenment Clarifies the requirements for comparative information. There are also consequential amenments to IAS 34 Interim Financial Reporting an FRS 47 First-time Aoption of Stanars by Entities Other Than Those Previously Applying NZ IFRSs. Aligns with NZ IAS 1 Presentation of Financial Statements (approval 8). Clarifies when servicing equipment is consiere property, plant an equipment or inventory. Aligns with NZ IAS 16 Property, Plant an Equipment (approval 8). Clarifies the treatment of the carrying amount an accumulate epreciation when an item of property, plant an equipment is revalue. Aligns with NZ IAS 16 Property, Plant an Equipment (approval 34). Clarifies the acceptable methos of epreciating assets. Aligns with NZ IAS 16 Property, Plant an Equipment (approval 43). Clarifies the tax effect of istributions to holers of equity instruments. Aligns with NZ IAS 32 Financial Instruments: Presentation (approval 8). IPSAS 31 Intangible Assets Clarifies the treatment of the carrying amount an accumulate amortisation when an intangible asset is revalue. Aligns with NZ IAS 38 Intangible Assets (approval 34). Clarifies the acceptable methos of epreciating assets an amortising intangible assets. Aligns with NZ IAS 38 Intangible Assets (approval 43). 59 Feb-15 Disclosure Initiative (Amenment to IAS 1) The narrow-scope amenments to IAS 1 Presentation of Financial Statements clarify, rather than significantly change existing IAS 1 requirements. The amenments are esigne to further encourage entities to apply professional jugement in etermining what information to isclose in their financial statements. The amenments relate to materiality, orer of the notes, subtotals, accounting policies an isaggregation. This amenment may affect the level of isclosures in the iniviual financial statements of for-profit entities but has no implications for that entity s CFISnet scheules for the Financial Statements of Government. Feb 2016 up: 61 incorporates the amenments of NZ IAS 1 into the equivalent for s ( IPSAS 1). For-profit an s are now aligne for these items. Treasury: v7 8

9 / 58 Feb-15 Investment Entities: Applying the Consoliation Exception (Amenments to NZ IFRS 10, NZ IFRS 12 an NZ IAS 28) New requirements for investment entities to use fair value accounting came into effect in early 2014 (approvals 14 an 15), but early aoption highlighte a series of issues. This amenment clarifies: Any impact on for-profit entities as a result of these clarifications epens on the accounting policy that has been applie previously if these events or transactions occur. - An entity can apply the consoliation exemption even if its investment entity parent measures its subsiiaries at fair value in accorance with IFRS A subsiiary that provies services relate to the parent s investment activities shoul not be consoli if the subsiiary itself is an investment entity. - When applying the equity metho to an associate or a joint venture, a non-investment entity investor in an investment entity may retain the fair value measurement applie by the associate or joint venture to its interests in subsiiaries. - An investment entity measuring all of its subsiiaries at fair value provies the isclosures relating to investment entities require by IFRS 12 Disclosure of Interests in Other Entities. Feb 2016 up: In February 2016 the NZASB issue exposure raft IPSAS 35 which takes these amenments into account. If issue as a, for-profit an s will then be aligne for these items. June 2017 Up: The new IPSAS 35 has been approve in Dec 2016, which is effective in 2019/20. Refer to NZASB no. 78 above. 57 Dec-14 Disclosure Concessions for NZ IFRS 15 Revenue from Contracts with Customers The amenment establishes isclosure concessions for for-profit entities that are eligible for an elect to apply those concessions (tier 2 entities). Tier 2 isclosures concessions in the are enote with an asterisk (*) or by RDR paragraphs associate with the concession. Jan-17 This amenment applies to tier 2 for-profit entities who early aopt the new revenue. Feb 2016 up: 62 efers the manatory effective of NZ IFRS 15 from perios beginning on or after 1 January 2017 to perios beginning on or after 1 January Dec Omnibus Amenments to NZ IFRSs This is to make the following necessary but insignificant changes: Stanar NZ IFRS 1 First-time Aoption of NZ IFRSs FRS 44 New Zealan Aitional Disclosures Amenment Clarify the of paragraph 4A. Require isclosure of the statutory basis uner which financial statements have been prepare. Apr-15 As these amenments in the s are largely eitorial we o not expect any changes in practice. However, any impact on for-profit entities as a result of these clarifications epens on the accounting policy or isclosures that have been applie previously if these events or transactions occur. Appenix C of NZ IFRS 4 Insurance Contracts an Appenix E of NZ IFRS 7 Financial Instruments Disclosures NZ IFRS 10 Consoli Financial Statements an NZ IAS 28 Accounting for Investments in Associates an Joint Ventures Align the terminology with relevant legislation. Inclue the generic RDR paragraph in two s that contain a concession. 55 Nov-14 Annual improvements to NZ IFRSs Cycle The annual improvement was to make non-urgent but necessary amenments to four s: Stanar NZ IFRS 5 Non-current Assets Hel for Sale an Discontinue Operations Amenment Clarification Clarifies when an entity reclassifies an asset from hel for sale to hel for istribution to owners or vice versa, that the change in classification shoul be treate as a continuation of the original plan of isposal. It also clarifies that an entity shoul cease to apply hel-foristribution accounting in the same way as it ceases to apply the helfor-sale accounting when it no longer meets the hel-for-sale criteria. Any impact on for-profit entities as a result of these clarifications epens on the accounting policy that has been applie previously if these events or transactions occur. Feb 2015: We have not yet conucte any review to etermine if any changes to the accounting treatment in the iniviual of this amenment) coul flow unchange through to CFISnet scheules for the Financial Statements of Government. NZ IFRS 7 Financial Instruments Disclosures Clarification Clarifies when an entity with servicing contracts has continuing involvement for the purposes of applying the isclosure requirements in NZ IFRS 7. The amenments also clarify that the aitional isclosure require by the amenments to NZ IFRS 7 concerning offsetting is not specifically require for all interim perios. Feb 2016 up: 60 incorporates the amenments of NZ IFRS 5 an NZ IAS 34 into the equivalent for s ( IFRS5 an IAS 34). an s are now aligne for these items. NZ IAS 19 Employee Benefits NZ IAS 34 Interim Financial Reporting Clarification Clarifies that the high quality corporate bons use in estimating the iscount rate for post-employment benefits shoul be enominate in the same currency as the benefits to be pai. Clarification Clarifies what is meant by the reference to information provie elsewhere in the interim report an require a cross-reference to such information. Treasury: v7 9

10 / 54 Oct-14 Sale or Contribution of Assets between an Investor an its Associate or Joint Venture (Amenments to NZ IFRS 10 an NZ IAS 28) The amenment aresses the conflict between the requirements of IFRS 10 an IAS 28 in ealing with the sale or contribution of assets between an investor an its associate or joint venture. When a parent loses control of a subsiiary in a transaction with an associate or joint venture, there is a conflict between the existing guiance on consoliation (NZ IFRS 10) an equity accounting (NZ IAS 28). In this scenario NZ IFRS 10 requires the recognition of a full gain or loss on the loss of control of a subsiiary (even though the parent retains joint control of, or significant influence over, the investee), whereas NZ IAS 28 requires the recognition of a partial gain or loss in transactions between an investor an its associate or joint venture). While the original conflict arose from the transfer of subsiiaries, the amenments are broaer an cover the transfer of assets involving an associate or a joint venture. The amenments require the recognition of the full gain or loss when a transaction involves a business (whether it is house in a subsiiary or not). A partial gain or loss is recognise when a transaction involves assets that o not constitute a business, even if those assets are house in a subsiiary. For transactions of the type, entities nee to carefully consier the efinition a business in accorance with NZ IFRS 3. This change only applies to for-profit entities that sell or contribute assets to associates an joint ventures an any impact will epen on how entities currently account for these types of transactions. Feb 2015: We have not yet conucte any review to etermine if any changes to the accounting treatment in the iniviual of this amenment) coul flow unchange through to CFISnet scheules for the Financial Statements of Government. Feb 2016 up: In February 2016 the NZASB eferre the effective to 1 January June 2017 Up: IPSAS 34 was approve in Dec 2016 an effective for 2019/20. Refer to NZASB no.77 an 78 above. 53 Oct-14 Amen the of NZ IFRS 9 (2009) an NZ IFRS 9 (2010) The effective of both versions of NZ IFRS 9 () has move from 1 January 2015 to 1 January This amenment has no consequence for the Financial Statements of the Government. The Government has transitione to new s an both these versions of NZ IFRS 9 () are not inclue in the suite of s. Feb 2016 up: The IPSASB an NZASB are currently consiering a convergence project to potentially bring this in to the public sector suite. June 2017 Up: A new IFRS 9 has been issue in Dec 2016 (refer NZASB approval no. 82 above). We are proposing to early aopt IFRS 9 in 2018/19 to ensure all entities are reporting financial instruments on same basis in CFISnet scheules for the Financial Statements of the Government. 52 Oct-14 Equity Metho in Separate Financial Statements (Amenments to NZ IAS 27) The amenment reinstates the option to use the equity metho to measure investments in subsiiaries, joint ventures an associates, an to also clarify some matters relate to balances with subsiiaries an joint arrangements. This change will only apply if a for-profit entity applies the new option. Feb 2015: We have not yet conucte any review to etermine if any changes to the accounting treatment in the iniviual of this amenment) coul flow unchange through to CFISnet scheules for the Financial Statements of Government. The option to use the equity metho is available in s, so this amenment in NZ IAS 27 is unlikely to give rise to a mixe-group reporting issue. Feb 2016 up: In February 2016 the NZASB issue exposure raft IPSAS 34 which takes this amenment into account. If issue as a, for-profit an s will then be aligne for these items. 51 Aug-14 NZ IFRS 9 Financial Instruments NZ IFRS 9 (as issue in 2014) contains the accounting requirements for the recognition an measurement of financial assets an liabilities, the erecognition requirements for financial assets an liabilities, impairment of financial assets an hege accounting (excepting macro heging). The 2014 contains a new category of financial assets an new requirements for impairment of financial assets an guarantees to exten creit. This version of IFRS 9 completes the IASB s project to replace IAS 39 Financial Instruments except for the requirements relating to a portfolio hege of interest rate risk. A for-profit entity who early aopts NZ IFRS 9 will nee to ajust its CFISnet scheules to ensure they comply with Crown policy an s where IPSAS 28, 29 an 30 are not met as a result of applying NZ IFRS 9. While the IPSASB is committe to unertaking a convergence review of IPSASs as a result of IFRS 9 being finalise, we o not know what the outcome will be or when any amenments will be issue. 50 Aug-14 Authoritative Notice Public Benefit Entities Framework The Framework is base on the New Zealan equivalent to the IASB Conceptual Framework for Financial Reporting (2010): Part B Public Benefit Entities Only (NZ Framework: Part B). The Framework is a transitional framework for public benefit entities. It is issue pening the evelopment an issuance of a conceptual framework by the International Public Sector Accounting Stanars Boar. Apr-15 No impact for the Financial Statements of Government. The framework is authoritative guiance only. This transitional framework is substantially the same as the one uner NZ IFRS previously applie by s. Treasury: v7 10

11 / 49 Aug-14 Suite of Stanars for Tier 1 an Tier 2 s NFP Enhancements Enhancements to the s to make them more relevant an unerstanable for entities in the not-for-profit (NFP) sector. The enhancements will not change the requirements for public sector entities. N/A N/A Not applicable to public sector s. 48 Aug-14 Interests in Other Entities (Amenments to SFR-A NFP) Same amenment as for public sector s below. N/A N/A Not applicable to public sector s. 47 Aug-14 Interests in Other Entities (Amenments to SFR-A PS) Tier 3 s who elect to use Simple Format Reporting (SFR) are to account for significant interests in other entities in accorance with the Tier 2 accounting s. Jul-14 is not permitte This amenment has no consequence for the Financial Statements of the Government which is a Tier 1 reporting entity, nor for entities that report their results through CFISnet scheules for consoliation purposes. 46 Aug-14 Fair Value Disclosures by Retirement Benefit Plans (Amenments to NZ IAS 26) Amenments to NZ IAS 26 base on the isclosure requirements in NZ IFRS 13; information about the of the fair value hierarchy to the assets an liabilities to retirement benefit plans. Jan-15 This amenment only applies to entities who meet the efinition of a retirement benefit plan. There are no for-profit entities that meet the efinition of a retirement benefit plan within the Government reporting group. 45 Aug-14 Agriculture: Bearer Plants (Amenments to NZ IAS 16 an NZ IAS 41) Bearer plants are to be accounte for in the same way as Property, Plant an Equipment uner NZ IAS 16, because their operation is similar to that of manufacturing. The prouce growing on bearer plants, however, remains within the scope of NZ IAS 41 (fair value less costs to sell). The NZASB have not incorporate this into the s. It is likely that the IPSASB will consier the amenments in the near future. This amenment applies to for-profit entities that have bearer plants. Feb 2015: We have not yet conucte any review to etermine if any changes to the accounting treatment in the iniviual of this amenment) coul flow unchange through to CFISnet scheules for the Financial Statements of Government. Feb 2016 up: The IPSASB inclue this amenment in exposure raft 58: Improvements to IPSASs If this becomes an amenment in the suite of s this woul eliminate a mixegroup issue). June 2017 up: This amenment now applies to the suite of s (refer NZASB approval 76 above) so both forprofits an s are now on the same reporting basis for bearer plants. 44 Jun-14 Revenue from Contracts with Customers (NZ IFRS 15, replaces IAS 18 an IAS 11). This establishes principles for reporting about the nature, amount, timing an uncertainty of revenue arising from an entity s contracts with customers. It prescribes when an entity will recognise revenue, how much revenue to recognise, an what isclosures to make about revenue. For contracts which exten over time or have multiple elements, the new coul result in some changes to the amount or timing of revenue recognition. The NZASB have not incorporate this into the s at present. The IPSASB is unertaking a review of the IPSAS revenue s; the NZASB will monitor progress on the IPSASB project to ensure its timely elivery an review its ecision if this is not the case. Jan-17 This amenment applies to for-profit entities who early aopt the new revenue. Any impact on for-profit entities will epen on the revenue accounting policy that has been applie previously. Feb 2015: We have not yet conucte any review to etermine if any changes to the accounting treatment in the iniviual of this amenment) coul flow unchange through to CFISnet scheules for the Financial Statements of Government. Feb 2016 up: 62 efers the manatory effective of NZ IFRS 15 from perios beginning on or after 1 January 2017 to perios beginning on or after 1 January Jun-14 Clarification of Acceptable Methos of Depreciation an Amortisation (Amenments to NZ IAS 16 an NZ IAS 38) This clarifies that it is not appropriate to have a epreciation or amortisation metho which is base on revenue generate from an activity that inclues use of an asset. It is not appropriate, because a revenue-base metho woul reflect a pattern of economic benefits generate from operating the business (of which the asset is part), rather than economic benefits consume through use of the asset. Any impact on for-profit entities will epen on whether this specific epreciation policy ha been applie previously. Feb 2015: We have not yet conucte any review to etermine if any changes to the accounting treatment in the iniviual of this amenment) coul flow unchange through to CFISnet scheules for the Financial Statements of Government. Feb 2016 up: 60 incorporates the amenments of NZ IAS 16 an NZ IAS 38 into the equivalent for s ( IPSAS 17 an IPSAS 31). For-profit an s are now aligne for these items. Treasury: v7 11

12 / 42 Jun-14 Accounting for Acquisitions of Interests in Joint Operations (Amenments to NZ IFRS 11) This requires the acquirer of an interest in a joint operation in which the activity constitutes a business, as efine in NZ IFRS 3 Business Combinations, to apply all of the principles on business combinations accounting in NZ IFRS 3 an other NZ IFRSs except for those principles that conflict with the guiance in this NZ IFRS. In aition, the acquirer shall isclose the information require by NZ IFRS 3 an other NZ IFRSs for business combinations. Any impact on for-profit entities will epen on whether this transaction arises an the policy applie previously. Feb 2015: We have not yet conucte any review to etermine if any changes to the accounting treatment in the iniviual of this amenment) coul flow unchange through to CFISnet scheules for the Financial Statements of Government. Feb 2016 up: In February 2016 the NZASB issue exposure raft IPSAS 37 which takes this amenment into account. If issue as a, for-profit an s will then be aligne for these items. 41 Jun-14 RDR Hege Accounting Disclosures (Amenments to NZ IFRS 9 (2013)) This ientifies Reuce Disclosure Regime (RDR) isclosure concessions for Tier 2 for-profit entities that apply the hege accounting requirements in NZ IFRS 9 (2013). The isclosure requirements relating to hege accounting are currently containe in Appenix C of NZ IFRS 9 (2013). Those isclosure requirements will be foun in NZ IFRS 7 Financial Instruments: Disclosures once the consequential amenments arising from the issuance of NZ IFRS 9 (2013) have been compile into the relevant s. When an entity aopts NZ IFRS 9 (2013) All for-profit entities are require to report tier one isclosures for the Financial Statements of Government. A for-profit entity will nee to ajust its CFISnet scheules to ensure they comply with Crown policy an s where IPSAS 29/NZ IAS 39 () hege criteria are not met as a result of applying NZ IFRS 9. guiance/reporting/ipsas/for-profit 40 Apr-14 Statutory Funs (Amenments to Appenix C of NZ IFRS 4) Amenments applicable to statutory funs of life insurance companies. Jul-14 This amenment only applies to entities who are life insurers. There are no forprofit life insurers within the Government reporting group. 39 Mar-14 Issue of Authoritative Notices for Conceptual Frameworks When the new Financial Reporting Act 2013 came into affect 1 April 2014, the transitional provisions in the FRA 2013 provie for every financial reporting approve or issue uner the FRA 1993 to continue in effect uner the FRA However, this automatic carry-forwar oes not apply for pronouncements that give authoritative support uner FRA Therefore the following pronouncements were issue as Authoritative Notices: Both s an forprofit Apr-14 This amenment has no consequence for the Financial Statements of the Government or for the iniviual reporting of s an for-profit entities. (a) the New Zealan Equivalent to the IASB Conceptual Framework for Financial Reporting (2010) (NZ Framework) for for-profit entities applying NZ IFRS for perios beginning on or after 1 April 2014; (b) the Public Benefit Entities Framework ( Framework) for public benefit entities applying Stanars for perios beginning on or after 1 July 2014; (c) the New Zealan Equivalent to the IASB Conceptual Framework for Financial Reporting (2010) (Diff Rep) (NZ Framework (Diff Rep)) for for-profit entities applying NZ IFRS (Diff Rep) for perios beginning on or before 31 March 2015; an () the New Zealan Conceptual Framework for Financial Reporting () for public benefit entities applying NZ IFRS (incluing those applying ifferential reporting concessions) for perios beginning on or before 30 June 2014 (for a public sector public benefit entity) an 31 March 2015 (for a not-for-profit entity). 38 Mar-14 to issue NZ IFRS 14: Regulatory Deferral Accounts This amenments permits an entity that aopts NZ IFRS to continue to use, in its first an subsequent NZ IFRS financial statements, its previous GAAP accounting policies for accounting for eferral account balances. This only applies to entities that have not alreay aopte NZ IFRS. All for-profit entities in the Crown reporting group have aopte NZ IFRS an therefore, this amenment is not applicable. 37 Feb-2014 to issue Amenments to Accounting Stanars: Omnibus Amenments (Legislative Up) Amenments to terminology an removal of references to true an fair overrie. The major effect is to amen accounting s as a consequence of the enactment of the Financial Reporting Act 2013, the Financial reporting Amenments to Other Enactments 2013 an the Financial Markets Conuct Act 2013 by: Both s an forprofit 1 July 2014 For-Profit 1 April 2014 This amenment has no consequence for the Financial Statements of the Government or for the iniviual reporting of s an for-profit entities. - Removing from the accounting s the paragraphs that contain references to the true an fair overrie limitations in the Financial Reporting Act; an - amening the accounting s to reflect changes in terminology as a consequence of the Financial Reporting Act 2013 (an consequential amenments) an the Financial Markets Conuct Act These amenments o not change the requirements in the accounting s. Treasury: v7 12