New Zealand

Details

  • Service: Audit, Advisory, Accounting Advisory Services
  • Type: Business and industry issue, Regulatory update
  • Date: 16/11/2012

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Simon Lee

Simon Lee

Technical Director - Accounting Advisory Services

+64 4 816 4678

  

Reporting news - For-profit standards package issued 

for profit-standards

 

Special edition


The newly introduced Reduced Disclosure Regime was released by the XRB on 15 November 2012.


Overview 
 

The External Reporting Board (“XRB”) has released the first standards as part of the implementation of the new Accounting Standards Framework (refer Reporting News – 12RN06 for more information about the new Framework). Apart from the introduction of the new Reduced Disclosure Regime there should be no impact on entities from the issuing of the new standards.

 

The new standards are effective for reporting periods beginning on or after 1 December 2012, with early adoption permitted. 

 

The new standards are available on the XRB website.


The Reduced Disclosure Regime


The Reduced Disclosure Regime (‘RDR’ or Tier 2 for-profit accounting standards) is effectively the ‘halfway’ mark between the current Differential Reporting Framework and full NZ IFRSs. It requires full compliance with the recognition and measurement requirements of NZ IFRSs, but with significantly reduced disclosure requirements. This suit of standards will benefit those entities that do not have public accountability (as defined), but are required currently to prepare full NZ IFRS financial statements.

 

Which entities will qualify?


An entity will qualify if it does not have public accountability1, or if it is a for-profit public sector entity with total expenses less than $30 million. This means that entities that currently cannot qualify for differential reporting because they are ‘large’, will likely be able to qualify immediately.

 

Early adopt, and benefit now.

 

The XRB have allowed early adoption of the new framework. This means that all financial reporting periods beginning on, or before 30 November 2012 can early adopt RDR. The only requirement is that the reporting entity discloses the early adoption of RDR in their financial statements.

 

Entities who have not yet finalised their 30 June 2012 NZ IFRS financial statements, and who qualify to apply Tier 2, should consider taking advantage of the new RDR framework now. There are only two weeks left before the 5 month sign off deadline.

 

Not early adopting?


For those entities that choose not to early adopt the new standards early it will be status quo until the first reporting period beginning on or after 1 December 2012.  
 

Want to know more or need help to update your financial statements?

 

Contact your usual KPMG contact or Sanel Tomlinson (09 367 5915) or Simon Lee (04 816 4678).

 

[1][1] Entities with public accountability include: those with equity or debt instruments that are traded in a public market, those that hold assets in a fiduciary capacity for a broad group or outsiders as one of their primary businesses, an issuer as defined by the Securities Act 1978 or any other Act, Registered Bank or ‘deposit taker’ as defined by the Reserve Bank Act 1989, or registered superannuation scheme. Refer XRB A1 (FP Entities Update) for more detail.