Approved accounting standards framework
On 2 April 2012 the Minister of Commerce, Hon Craig Foss, approved the New Zealand Accounting Standards Framework (including the Draft Tier Strategy) proposed by the External Reporting Board (XRB). This Reporting Update summarises the approved framework and highlights the key changes from the XRB’s initial Consultation Papers.
FMA issues revised draft guidance note on effective disclosures
The FMA is seeking to improve disclosures in registered prospectuses and investment statements and in late January issued for comment a proposed guidance note - “Effective Disclosure”. We outlined the key features of the proposed guidance note in Reporting Update 12RN-02A [PDF: 200KB].
On 5 April 2012 the FMA published a revised draft guidance note. This Reporting Update summarises the key changes made to the draft guidance notes based on submissions and feedback received by the FMA.
In the Headlines
Issue 2012/05 - MG consultation: governance review / PIOB
The Monitoring Group (MG) is consulting on whether changes should be made to the governance arrangements of the Public Interest Activity Committees (PIACs) of the International Federation of Accountants (IFAC). The MG believes that this consideration is needed in response to the financial crisis, which raised questions as to whether audit and ethics standards have fulfilled public expectations
Other KPMG Publications
IFRS – Leases Newsletter – Issue 10, March 2012
How will the new leases standard affect company profits? The IASB and FASB (the boards) returned to this question in light of concerns regarding the front-loaded pattern of lessee expense arising from the proposed right-of-use model. The issue has divided the boards and delayed the leases project.
- Lessee profile of expense recognition discussed at length.
- Three alternative approaches to lessee accounting discussed, all ‘on-balance sheet’ for lessee.
- No tentative decisions, only disagreement on the path forward.
- Revised leases exposure draft delayed until second half of 2012.
IFRS – Insurance Newsletter – Issue 24, March 2012
This edition of IFRS – Insurance Newsletter highlights the results of the IASB and FASB discussions in March 2012 on the joint insurance contracts project. In addition, it provides the current status of the project and anticipated timeline for completion.
- IASB holds educational session on use of other comprehensive income for insurance contract remeasurement.
- Boards decide that an investment component in an insurance contract is an amount that the insurer is obliged to pay regardless of whether an insured event occurs.
- Insurers would not be required to present investment components separately in the statement of financial position.
- IASB decides to exclude investment components from the aggregate premium in the statement of comprehensive income.
- Disclosures required on the portion of the liability that represents the aggregated portion of premiums excluded from the statement of comprehensive income and amounts payable on demand.
- Boards will further consider whether any investment components that are sufficiently distinct should be separated and recognised in the financial instruments standards.
- Boards decide that the unit of account for determining the residual/single margin and onerous contracts should be at the portfolio level. IASB and FASB decide on different definitions for a portfolio and units of account for the release of the residual/single margins.
- FASB scopes in financial instruments with DPFs into its proposed financial instruments standards.
Sustainable Insight: Expect the Unexpected
In this issue of Sustainable Insight, KPMG’s network of firms analyzes a system of ten sustainability megaforces that will impact each and every business over the next 20 years.
Population growth, exploitation of natural resources, climate change and other factors are putting the world on a development trajectory that is not sustainable. In other words, if we fail to alter our patterns of production and consumption, things will begin to go badly wrong. How wrong and for whom, is also explored in the report.
NZ Accounting Standards Board Communiqué 2012/4 – 23 March 2012
The New Zealand Accounting Standards Board held its most recent meeting in Auckland on 22 March 2012. The main matters considered at the meeting related to the new Accounting Standards Framework, other matters considered included the following.
- Exposure drafts relating to the for-profit and interim PBE aspects of the Accounting Standards Framework.
- Confirmed a list of draft PBE standards to be included in the suite of PBE standards.
- A draft submission to the IPSASB on the Consultation paper Reporting Service Performance Information.
- The board agreed to take part in the IASB's post-implementation review of IFRS 8 Operating Segments.
- The board approved the draft work plan for the remainder of 2012 for forwarding to the External Reporting Board for approval.