New Zealand


  • Service: Audit, Advisory, Accounting Advisory Services
  • Type: Business and industry issue
  • Date: 8/03/2012

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Reporting news - 12RN04 

Welcome to this week's Reporting News, a regular summary of publications on reporting matters to keep you informed about financial reporting developments.

Reporting updates


No reporting updates in this issue.


In the Headlines


No In the Headlines in this issue.


Other KPMG Publications


Turning global risk into opportunity: Priorities for consumer company CFOs

This report examines the findings of a survey of 350 senior finance executives from consumer markets companies around the world, highlighting the strategies finance leaders are using to help their businesses navigate turbulent environments and achieve growth. Featuring interviews with finance executives from leading consumer markets companies, the report sheds light on the issues and trends impacting key decision-makers in the industry.


Key findings of the research


  • Successful companies will continue to invest despite a worsening outlook and declining revenues.
  • Developed markets remain a core focus and an important source of future business expansion while emerging markets represent the biggest growth opportunities.
  • Mobile is the leading technology being used to maximise sales.
  • Risk conversations are becoming more frequent, but an enterprise-wide view of risk is not yet a reality.
  • Sustainability has moved from being a ‘nice-to-have’ to a core business issue.



First Impressions: Offsetting amendments


First Impressions contains a detailed analysis of the Amendments to IAS 32 and IFRS 7, prefaced with a summary of the key facts and impacts, and enhanced with KPMG’s insight.



  • The IASB and the FASB are no longer pursuing converged offsetting models.
  • However, the IASB and the FASB issued common disclosure requirements. The IASB has built these requirements into IFRS 7.
  • The Amendments to IAS 32 clarify when:
     an entity currently has a legally enforceable right to set off; and
     gross settlement is equivalent to net settlement.
  • Amendments to IAS 32: effective for annual periods beginning on or after 1 January 2014.
  • Amendments to IFRS 7: effective for annual periods beginning on or after 1 January 2013 and interim periods within those annual periods.


IFRS for Investment Funds: Liability vs equity classification for financial instruments


This publication will guide you through practical application issues that investment funds may encounter when applying IAS 32. It discusses the key requirements and includes interpretative guidance and illustrative examples.




  • Investment funds frequently issue shares or units with unique, entity-specific characteristics, and they often face challenges in determining whether such instruments should be classified as liability or equity under IAS 32.
  • This publication focuses on the classification of some common types of financial instruments issued by investment funds, including puttable instruments and instruments that impose on the entity an obligation to deliver a pro rata share of net assets only on liquidation.



New on the Horizon: Revenue recognition for real estate investment and development


This publication looks at the potential impact of the revised exposure draft on revenue in the real estate industry, for both developers and investors.




  • The revised exposure draft features new criteria for recognising revenue over time and includes an example illustrating the application of those criteria to sales of residential real estate. 
  • Real estate entities may recognise revenue on transactions with risk exposure or ongoing involvement in a property (e.g. rental guarantees) earlier than at present. However, recognition of performance-based fees contingent on hard to predict outcomes may be deferred.
  • A key concern remains as to whether the revised proposals are clear enough to be applied consistently across the industry.



New on the Horizon: Revenue recognition for aerospace and defence companies


This publication looks at the potential impact of the revised proposals on aerospace and defence companies, discusses whether their previous concerns have been addressed, and highlights application issues relevant to both IFRS and US GAAP issuers.




  • The good news is that changes to the criteria for bundling goods and services and recognising revenue over time mean that a broader range of contracts will qualify for percentage of completion accounting than under previous proposals.
  • However, many challenges remain for A&D companies, including assessing when to recognise unapproved or unpriced orders, and gathering the information required to meet additional disclosure requirements.
  • A key question remains as to whether the proposals are sufficiently clear to be interpreted and applied consistently across the industry.



Impact on mining companies: Changes to joint venture accounting


The financial statements of many mining companies could look very different in the future as a result of changes to the accounting for joint arrangements. This newsletter discusses the new accounting requirements and the potential impacts on mining companies.




  • Overview of requirements of IFRS 11 Joint Arrangements.
    Potential impacts of IFRS 11 on:
     financial statements, including changes to key performance measures; and
     communications with stakeholders and the systems of mining companies.


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