In March 2012 the XRB Board issued a document outlining a new Accounting Standards Framework that will become effective progressively over the period 2012-2016. That document, which was entitled "Proposals for the New Zealand Accounting Standards Framework Incorporating the Draft Tier Strategy", and which was approved by the Minister of Commerce in April 2012, is available here.
The Accounting Standards Framework was updated in December 2015 to reflect legislative changes since 2012 and the manner in which the Tier requirements are described. The updated Accounting Standards Framework is available here.
The finalisation of the new Accounting Standards Framework followed a development and consultation process that occurred over the four-year period from 2008 – 2012. Further information about the process, and the matters considered as part of the development of the new Accounting Standards Framework, is available here.
The new Accounting Standards Framework involves a two sector, multi-standards, tiered approach as summarised in the following table. For further details please see the Accounting Standards Framework document.
||Public Benefit Entities
| Tier 1
||Publicly accountable (as defined); or
Large (as defined) for-profit public sector entities
||Publicly accountable (as defined); or Large (as defined)
|Tier 2||Non-publicly accountable and
Non-large for-profit public sector entities
Which elect to be in Tier 2.
|NZ IFRS Reduced Disclosure Regime
(NZ IFRS RDR)
|Non-publicly accountable (as defined) and non-large (as defined)
Which elect to be in Tier 2
|PBE Standards Reduced Disclosure Regime (PBE Standards RDR)
| Tier 3
||Non-publicly accountable (as defined) with expenses ≤ 2 million
which elect to be in Tier 3.
|PBE Simple Format Reporting Standard - Accrual (PSFR-A)
| Tier 4
||Entities allowed by law to use cash accounting
which elect to be in Tier 4.
|PBE Simple Format Reporting Standard - Cash (PSFR-C)
In September 2013 the XRB issued a policy paper entitled “Policy Approach to Developing PBE Standards”. Although published separately, the Policy Approach can be thought of as equivalent to an addendum to the Accounting Standards Framework document. It is designed to elaborate on the approach outlined in paragraphs 149-151 of that document.
The Policy Approach paper establishes an approach, based on a “development principle” and a series of “rebuttable presumptions”, which will be used by the NZASB to determine whether, and when, to make changes to the suite of PBE Standards.
The Policy Approach paper is available here.
In September 2016, the XRB issued its “Policy for dealing with audit reports received under the Companies Act 1993 and the Financial Markets Conduct Act 2013”.
The Policy sets out the processes that the Board of the XRB and its sub-Boards, the NZASB and the NZAuASB, will follow when audit reports are sent to the XRB by auditors in accordance with the Companies Act 1993 and the Financial Markets Conduct Act 2013. The Policy also applies when audit reports are referred to the XRB by any other party.
The Policy is available here.
The implementation of the Accounting Standards Framework requires the development and issuing of several new suites of accounting standards. The XRB Board plans to issue exposure drafts and then finalise and issue the suites of standards in a five stage process. Different release and submission dates will apply to each stage.
Click here for more information about the roll-out.