NZASB Update 11/2020

Recent NZASB Meeting

4 June 2020 

The NZASB meeting was a half day morning meeting held via videoconference.

The Board, in response to COVID-19, approved:

• the for-profit standard amending NZ IFRS 16, COVID-19-Related Rent Concessions; and
• two Invitations to Comment (ITC) and Exposure Drafts (ED) which propose more specific going concern disclosures for Tier 1 and Tier 2 for-profit entities and Tier 1 and Tier 2 public benefit entities (PBEs).

The Board also approved a draft ITC and ED proposing to defer the effective date of PBE IFRS 17 Insurance Contracts to 1 January 2023.

The Board received a presentation from NZAuASB staff on Assurance for Extended External Reporting (EER).

You can access the public agenda, public meeting papers and website notice for the 4 June meeting on our website. 

 Have a look

Covid-19-Related Rent Concessions

For-profit amending standard issued  

The NZASB has issued Covid-19-Related Rent Concessions. 

This standard amends NZ IFRS 16 Leases to make it easier for lessees to account for rent concessions granted as a result of COVID-19, such as rent holidays and temporary rent reductions.

The amendment provides an optional practical expedient for lessees (but not for lessors) for assessing whether a rent concession related to COVID-19 is a lease modification when applying NZ IFRS 16.

The practical expedient applies to recent concessions occurring as a direct consequence of the COVID-19 pandemic, and only when other conditions are met ― including that any reduction in lease payments affects only payments originally due on or before 30 June 2021.

The amendments are applicable for annual reporting periods beginning on or after 1 June 2020 with early application permitted, including financial statements not yet authorised for issue at 11 June 2020.

 Have a look

Going Concern Disclosures

Two exposure drafts issued

The NZASB is seeking comments on proposals to establish more specific going concern disclosure requirements in situations where the entity's management have determined that the going concern basis of preparation is appropriate, but is aware of events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern.

More specific going concern disclosure requirements are proposed with respect to these situations where management has either considered material uncertainties and/or applied significant judgement in forming the view that the going concern basis of financial statement preparation remains appropriate.

The NZASB feel that the proposals will be helpful to:

• users – by ensuring they get relevant and transparent information;
• preparers – more specificity on required disclosures helps them to know what information to provide to users; and
• auditors – the proposed disclosure requirements will help align the requirements in accounting standards with the requirements in auditing standards for auditors to assess the adequacy of going concern disclosures.

While responding to the increased uncertainty arising from COVID-19 was an initial driver for these proposals, the benefits described above are also expected to endure over the long term. 

The ITCs and EDs have been issued for PBEs and for-profit entities:

• Going Concern Disclosures (Proposed Amendments to FRS-44); and

Have a look at the FRS-44 proposals

• Going Concern Disclosures (Proposed Amendments to PBE IPSAS 1).

Have a look at the PBE IPSAS 1 proposals

 Comments are due to the NZASB by 24 July 2020.

PBE IFRS 17 – Deferral of Effective Date

Exposure draft issued

 The IASB has decided to defer the effective date of IFRS 17 Insurance Contracts by two years from 1 January 2021 to 1 January 2023. The IASB expects to issue the amendments to IFRS 17 towards the end of June 2020

The IASB recognised the practical difficulties for many insurers in implementing the significant changes brought about by IFRS 17 and agreed that a deferral in the effective date would allow insurers more time to fully consider the impact of IFRS 17 on their business.

To achieve the same effective date for PBE IFRS 17, IFRS 17 and NZ IFRS 17, the NZASB is proposing to defer the effective date of PBE IFRS 17 Insurance Contracts by one year from 1 January 2022 to 1 January 2023.

Comments are due to the NZASB by 22 July 2020.

Have a look

Upcoming NZASB Meeting

17 June 2020 

The NZASB meeting will be a full day meeting held via videoconference.

The Board will discuss and seek to approve the following for-profit standards:

• Onerous Contracts – Cost of Fulfilling a Contract;
• Property, Plant and Equipment: Proceeds before Intended Use;
• Reference to the Conceptual Framework; and
• Annual Improvements to NZ IFRS 2018-2020.

The Board will also discuss:

• The three IPSASB EDs on Revenue and Transfer Expenses;
• The IASB discussion paper Business Combinations - Disclosures, Goodwill and Impairment;
• The draft comment letter on the IASB ED General Presentation and Disclosures;

You can access the public agenda and public meeting papers for the 17 June meeting on our website. 

Have a look

The following full day meeting will be held in a virtual setting on Thursday, 13 August. 

 Vacancy in the Accounting Standards Team

Senior Technical Advisor Financial Reporting Standards

Applications for this role close Friday 12 June 2020.

Email applications and your resume to: 

hr@xrb.govt.nz  Attention: Kerrie Cole, Chief Operating Officer.

Have your say…

Before issuing a finalised accounting standard the NZASB and the international standard-setting boards, the IASB and the IPSASB, issue consultation documents. These documents seek your feedback on proposals that could potentially affect you.

We are currently consulting on the matters set out in the table below. 

Tell us how these changes could affect your entity or the entities you work with.

We welcome your comments and feedback, either formal or informal, by the due dates below.

You can submit your comments directly from the Exposure Draft pages on our website following the links below.

IASB Consultation Documents

IPSASB Consultation Documents

NZASB Consultation Documents