IFRSs issued but not yet effective (30 June 2012)
This publication lists newly effective standards and standards issued but not yet effective for interim and annual periods ending 30 June 2012 and will assist you in complying with the disclosure requirements of NZ IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, paragraph 30.
In the Headlines
Issue 2012/07 – Proposed guidance on accounting for levies
This In the Headlines summarises the recent draft interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operating in a Specific Market, issued on 31 May 2012.
The draft interpretation deals with levies and the recognition of a liability that are recognised in accordance with the definition of a liability in IAS 37 Provisions, Contingent Liabilities and Contingent Assets
Issue 2012/08 – The subsequent measurement of NCI put Liabilities
This In the Headlines summarises the recent draft interpretation DI/2012/2 Put Options Written on Non-controlling Interests, issued on 31 May 2012.
The draft interpretation deals with the accounting for the subsequent re-measurement of the NCI put liability and if it should be recognised in the profit or loss, or equity.
Other KPMG Publications
IFRS – Leases Newsletter – Issue 11, June 2012
This edition of IFRS – Leases Newsletter covers the updates that occurred at the June 2012 meeting, where the Boards returned to decision-making mode after a period of outreach and research on the leases project.
- A new lease classification test for lessees and lessors.
- A new ‘dual’ model for lessee expense recognition.
- Straight-line income statements recognition for many real estate leases.
- Accelerated income statement recognition for many equipment leases.
IFRS – Insurance Newsletter – Issue 26, May 2012
This edition of IFRS – Insurance Newsletter highlights the results of recent IASB and FASB discussions on the joint insurance contracts project. It also gives the current status of the project and anticipated timeline for completion.
- Boards decide that distinct investment components should be unbundled from insurance contracts and measured under the applicable financial instrument standards.
- IASB confirms that a risk adjustment and residual margin should be used in measurement.
- IASB introduces a fair value through other comprehensive income classification for the measurement of eligible debt instruments.
- Boards decides to require the use of other comprehensive income for recording changes in insurance liabilities (excluding liabilities that are contractually-linked to underlying assets) arising from changes in discount rates.
- Boards further discuss the presentation and measurement of acquisition costs. The IASB confirms acquisition costs should be included in the determination of the insurance liability rather than recognised as a separate asset.
IFRS – Insurance Newsletter – Issue 27, June 2012
This edition of IFRS – Insurance Newsletter highlights the results of the IASB and FASB discussions in June 2012 on the joint insurance contracts project. In addition, it provides the current status of the project and an expected timeline for completion.
- The Boards explore an earned premium approach for measuring and presenting premiums in the statement of comprehensive income.
When unbundling the Boards decided that:
- An insurer should attribute cash flows to an investment component and to an embedded derivative on a stand-alone basis.
- The amounts of consideration and discounts/ supplements should be attributed to the insurance component and/or service component in accordance with the revenue recognition proposals.
- Cash outflows related to more than one component should be allocated to those components on a rational and consistent basis, reflecting the costs that the insurer would expect to incur if it issued that component as a separate contract.
- Insurance Newsletter - Issue 27
IFRS – Financial Instruments Newsletter – Issue 2, May 2012
This edition of IFRS Newsletter: Financial Instruments highlights the discussions and tentative decisions of the IASB in May 2012 on the financial instruments (IAS 39 replacement) project.
- The IASB introduced a fair value through other comprehensive income (FVOCI) measurement category for eligible debt investments.
- FVOCI debt instruments will be measured on the statement of financial position at fair value but the income statement will reflect amortised cost accounting, with recycling of realised gains/losses.
- Eligible debt instruments will be measured at FVOCI if they are held within a business model whose objective is both to hold financial assets to collect contractual cash flows and to sell financial assets.
- For discounting expected impairment losses, an entity may use a rate between, and including, the risk-free rate and the effective interest rate.
- Modified financial assets will be considered for transfer between ‘buckets’ in the same was as other financial assets and any impairment losses will be recognised against the gross carrying value of the asset.
- Impairment allowances for lease receivables may be measured similarly to trade receivables with a significant financing component.
- A review draft of the revised general hedge accounting model is expected soon.
- The IASB has carved the macro hedging project out from the development of IFRS 9 and will prepare a discussion paper towards the end of 2012.
IFRS – Financial Instruments Newsletter – Issue 3, June 2012
This edition of IFRS Newsletter: Financial Instruments highlights the discussions and tentative decisions of the IASB in June 2012 on the financial instruments (IAS 39 replacement) project.
- The IASB and the FASB (the ‘Boards’) re-affirmed their previous decisions that the fair value through other comprehensive income (FVOCI) category is only available for financial assets that pass the contractual cash flow characteristics assessment, and are managed within a business model whose objective is both to hold financial assets to collect contractual cash flows and to sell financial assets.
- The IASB decided to extend the fair value option (FVO) for financial assets that meet the ‘accounting mismatch’ eligibility criterion as included in IFRS 9 Financial Instruments to financial assets in the FVOCI measurement category.
- The FASB decided to retain the FVO eligibility criteria related to management of a group of financial assets and liabilities on a net exposure basis that was included in its tentative classification and measurement model; this is different from the ‘accounting mismatch’ and ‘managed on a fair value basis’ FVO eligibility criteria included in IFRS 9.
- The Boards did not discuss impairment or hedge accounting.
FMA releases final guidance on Effective Disclosure
The Financial Markets Authority has published its final guidance notes for issuers, directors and advisers on Effective Disclosure.
The FMA has stated that it will start using the guidance note as part of its risk based assessment of offer documents for new issues from 9 July 2012, and for continuous issues, from 1 January 2013.
NZ External Reporting Board Communiqué 2012/10 – 21 June 2012
The XRB Board met on Wednesday 20 June 2012.
Discussion included the following matters:
- The Board approved for issue ED XRB A1 (FP Entities + PS PBEs Update) and its invitation to comment, this is an update from the first version issued in April as part of the “For-profit Package”.
- The Board approved the commencement of a project to consider certain PBEs with particular characteristics to be able to apply NZ IFRS, rather than the PBE Standards.
- The Board appointed the inaugural members of the External Reporting Advisory Panel.
- The Board approved two submissions. The first was to the Financial Markets Authority (FMA) on its consultation paper relating to the draft Guidance Note on disclosing non-GAAP financial information. The second was the International Federation of Accountants' (IFAC) Monitoring Group and Public Interest Oversight Board on the proposals to change the governance and oversight arrangements for IFAC standard setting boards
- The Board also spent some time being briefed on the IASB's current strategic focus and work programme.
NZ Accounting Standards Board Communiqué 2012/8 – 21 June 2012
The New Zealand Accounting Standards Board held its most recent meeting in Wellington on 19 June 2012. The main matters considered at the meeting related to the new Accounting Standards Framework.
The Board continued to develop the draft Standards to support the XRB Board’s proposed Accounting Standards Framework.
Discussion included the following matters:
- The Board approved for issue Annual Improvement 2009-2011 Cycle which sets out non-urgent but necessary amendments to NZ IFRSs.
- The Board approved for issue the Exposure Draft PBE Standards for Public Sector PBEs and an accompanying invitation to comment.
- The Board discussed the application of uniform accounting policies for like transactions and other events in similar circumstances when preparing consolidated financial statements, particularly when the group contains both for-profit and public benefit entities.
- The Board considered the working draft of the Not for profit PBE standards and the issues surrounding the recognition of grants and donations, and the simplification of terminology.
- The Board noted a report on the International Public Sector Accounting Standards Board (IPSASB) meeting held on June 11-14. XRB staff are assisting the IPSASB in revising IPSAS 6 Consolidated and Separate Financial Statements, IPSAS 7 Investments in Associates and IPSAS 8 Interests in Joint Ventures.
- The Board considered a draft submission to the IPSASB on ED 47 Financial Statement Discussion and Analysis.
- The Board is seeking views from New Zealand constituents and has placed the following IASB Exposure Drafts: Draft IFRIC Interpretation DI/2012/1 Levies Charged by Public Authorities on Entities that Operate in a Specific Market and Draft IFRIC Interpretation DI/2012/2 Put Options Written on Non-controlling Interests.
eIFRS – IASB and FASB agree on lease accounting approach
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have agreed on an approach for accounting for lease expenses as part of a project to revise lease accounting in International Financial Reporting Standards (IFRSs) and the U.S. Generally Accepted Accounting Principles (U.S. GAAP).