Institute of Chartered Accountants of New Zealand
                           December 2004




            Request for Com...
2

Discussion Paper to accompany ED-98 Framework for Differential Reporting for
Entities Applying the New Zealand Equivale...
3

Discussion Paper to accompany
ED-98 Framework for Differential Reporting for Entities Applying the New
Zealand Equivale...
4

Consistent with current practice, ED-98 proposes that entities taking advantage of
differential reporting concessions d...
5

        entities applying the New Zealand equivalents to IFRSs reporting regime,
        New Zealand entities need a di...
6

As noted above, the proposed differential reporting concessions are similar to the
existing concessions. However, New Z...
7

 The cash flow statement contains important information, some of which is not
  readily available from other financial...
8

   fair value less estimated point-of-sale costs at the point of harvest of agricultural
   produce harvested from an e...
9

NZ IAS 21 The Effects of Changes in Foreign Exchange Rates
NZ IAS 23 Borrowing Costs
NZ IAS 24 Related Party Disclosure...
10

The proposed differential reporting concessions will give entities currently qualifying
for differential reporting, an...
11

Increase in Size Criteria for Entities Continuing to Apply Existing NZ GAAP
ED-98 contains a consequential amendment t...
12

Request for Comments
The FRSB would welcome comment on the questions shown in the following table.
Respondents providi...
13

18   NZ IAS 26 Accounting and Reporting by Retirement Benefit Plans
19   NZ IAS 27 Consolidated and Separate Financial...
14

     c) the Privacy Act 1993?
52   Do you agree that adoption of the proposals in the exposure draft in New
     Zeala...
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  1. 1. Institute of Chartered Accountants of New Zealand December 2004 Request for Comment on Exposure Draft ED-98 Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime Issued by the Financial Reporting Standards Board Institute of Chartered Accountants of New Zealand
  2. 2. 2 Discussion Paper to accompany ED-98 Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime December 2004 Request for Comment on ED-98 Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime The FRSB has issued ED-98 Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime (ED-98). The FRSB seeks comments from constituents on the proposals in the Exposure Draft.1 Comments should be addressed to: The Director – Accounting & Professional Standards Institute of Chartered Accountants PO Box 11 342 WELLINGTON E-mail: ASD@icanz.co.nz The due date for comments to the FRSB is 25 February 2005. Comments should be submitted in writing. Email responses are preferred as that allows for the efficient collation and analysis of comments. Unless otherwise requested, submissions will be made available to the public. Respondents are requested to indicate on their submission on whose behalf (for example, own behalf, a group of people or an entity) the submission is being made. 1 ED-98 is based on the existing Framework for Differential Reporting. Copies of ED-91 showing marked-up changes to the existing Framework for Differential Reporting are available on the Institute’s website http://www.icanz.co.nz.
  3. 3. 3 Discussion Paper to accompany ED-98 Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime (ED-98) Introduction This Discussion Paper has two objectives:  to seek comments on the proposed Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime as outlined in ED-98. The majority of the Discussion Paper deals with these proposals; and  to seek comments on the proposed increase in the size criteria for entities continuing to apply Generally Accepted Accounting Practice in New Zealand as it exists prior to the adoption of New Zealand equivalents to IFRSs (existing NZ GAAP). This proposal is discussed immediately prior to the request for comments. Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime The Financial Reporting Standards Board (FRSB) is implementing the Accounting Standards Review Board’s (ASRB) decision to adopt International Financial Reporting Standards (IFRS)2 issued by the International Accounting Standards Board (IASB). Application of the standards will be to annual accounting periods beginning on or after 1 January 2007 (or, in the case of entities choosing to adopt early, reporting periods beginning on or after 1 January 2005). Under Generally Accepted Accounting Practice in New Zealand (NZ GAAP) the current Framework for Differential Reporting (revised March 2002) sets out criteria which qualify entities for differential reporting concessions and guide those who prepare financial reporting standards in establishing differential reporting exemptions in standards. The ASRB has directed that the Framework for Differential Reporting (issued February 1994, revised April 1997 and March 2002) has authoritative support within the accounting profession in New Zealand. With the finalisation of the ‘stable platform’ of New Zealand equivalents to IFRSs, the FRSB has turned its attention to identifying differential reporting concessions for entities applying New Zealand equivalents to IFRSs. There is some urgency to have differential reporting concessions available for application by early adopters of New Zealand equivalents to IFRSs. Many entities which currently qualify for differential reporting concessions are subsidiaries with an Australian or European parent and will be early adopters. The FRSB considers that it is appropriate to continue to provide differential reporting concessions to entities required by legislation to prepare general purpose financial statements. The FRSB has therefore issued ED-98 Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime (ED-98) which largely represents a conversion of the Differential Reporting Framework (revised March 2002) for entities applying New Zealand equivalents to IFRSs. 2 Unless otherwise specified, IFRS refer to International Accounting Standards (IAS) (inherited by the IASB from its predecessor body), IFRSs, and the interpretations of both types of standards.
  4. 4. 4 Consistent with current practice, ED-98 proposes that entities taking advantage of differential reporting concessions disclose both the criteria which establish the entity as a qualifying entity and the extent to which the entity has applied these concessions. The FRSB is seeking comments on the proposed changes to the size criteria and the proposed differential reporting concessions for entities applying the New Zealand equivalents to IFRSs reporting regime. Entities Continuing to Apply Existing NZ GAAP The FRSB is also proposing to increase the size criteria for entities continuing to apply existing NZ GAAP. ED-98 proposes to change the size criteria in the existing Framework for Differential Reporting by way of consequential amendment. The FRSB is seeking comments on the proposed change in size criteria for entities continuing to apply existing NZ GAAP. Approach and Objectives of ED-98 The FRSB’s approach to developing the proposed Differential Reporting Framework has been to treat the project as a short-term conversion of the existing Differential Reporting Framework. In developing ED-98 the FRSB has sought to identify differential reporting concessions which are equivalent to those in existing standards. The FRSB’s reasons for adopting this approach rather than developing new criteria and critically examining the requirements in New Zealand equivalents to IFRSs include the following:  The FRSB’s overriding aim in developing differential reporting concessions has been to identify an appropriate amount of disclosure for infrequent users of financial statements. New Zealand equivalents to IFRSs require significantly more disclosures than existing New Zealand GAAP. Any proposed differential reporting regime needs to significantly reduce the disclosures required or compliance costs for current qualifying entities would increase significantly.  The existing Differential Reporting Framework has provided a sensible way to reduce compliance costs for a large number of entities. There is no evidence that application of the existing Differential Reporting Framework has adversely affected users. Although the identification of concessions under the existing Differential Reporting Framework involves some subjectivity, it has a sound conceptual basis.  The FRSB considers that it would be unwise to develop a new approach to differential reporting given that a review of qualifying entities and differential reporting concessions is likely to be required in the short term. The two main projects which will have an impact on differential reporting are outlined below. o The IASB is currently working on a project on Accounting Standards for Small and Medium-sized Entities (SMEs)3. Although the IASB’s SME project could be helpful in developing a differential reporting framework for 3 Details of the IASB’s initial proposals are set out in Discussion Paper, Preliminary Views on Accounting Standards for Small and Medium-sized Entities (June 2004). The Discussion Paper and Comment Letters on the proposals are available from the Current Issues section of the IASB’s website http://www.iasb.org. IASB Updates provide a summary of the IASB’s discussion of current projects.
  5. 5. 5 entities applying the New Zealand equivalents to IFRSs reporting regime, New Zealand entities need a differential reporting framework now. A review of existing requirements will be undertaken when the IASB completes this project. The intention of such a review would be to consider the extent to which the determination of qualifying entities and the reporting concessions for qualifying entities can be aligned with the IASB’s proposals for SMEs. o The Ministry of Economic Development (MED) has recently issued two Discussion Documents Review of the Financial Reporting Act 1993 Part I: The Financial Reporting Structure (March 2004) and Review of the Financial Reporting Act 1993 Part II (November 2004)4. The outcome of this review will have an impact on the types of entities required to comply in full with New Zealand equivalents to IFRSs. However, legislative changes will be required to give effect to any changes resulting from this review. It will be appropriate to review the Differential Reporting Framework once this review has been completed and likely legislative changes are known.  Many entities which currently qualify for differential reporting concessions are subsidiaries with an Australian or European parent and will be adopting New Zealand equivalents to IFRSs for annual accounting periods commencing on or after 1 January 2005. Some of these entities currently qualify for differential reporting concessions. It is therefore important to develop a reporting framework for such entities now. Qualifying Entities The FRSB proposes to retain the approach used in the Framework for Differential Reporting (revised March 2002) for identifying which entities qualify for differential reporting concessions. However, it has been eight years since the size criteria were reviewed and the FRSB considers that an increase in the size criteria is appropriate. The FRSB proposes to amend the size criteria so that an entity qualifies as large if it exceeds any two of the following: (a) total income5 of $20.0 (previously $5.0) million; (b) total assets of $10.0 (previously $2.5) million; (c) 50 employees (previously 20). The proposed size criteria are the same as the size criteria in the MED Discussion Document Review of the Financial Reporting Act 1993 Part II (November 2004) (paragraph 255). The size criteria are subject to review if the MED subsequently changes the size criteria prior to finalisation of this Framework. The proposed increase in the size criteria should lead to a greater number of entities qualifying for differential reporting concessions. Proposed Approach to Identifying Differential Reporting Concessions 4 The discussion documents are available from the Ministry’s website at http://www.med.govt.nz/buslt/ bus_pol/bus_law/corporate-governance/financial-reporting/ 5 The proposed size criteria refer to “income” rather than “revenue”. This is because the definition of income in New Zealand equivalents to IFRSs is equivalent to the definition of revenue in the Statement of Concepts for General Purpose Financial Reporting.
  6. 6. 6 As noted above, the proposed differential reporting concessions are similar to the existing concessions. However, New Zealand equivalents to IFRSs include more disclosures and more pronouncements than current New Zealand GAAP. The FRSB’s general approach to identifying proposed differential reporting concessions is as follows:  “Roll over” existing differential reporting concessions by recommending a concession in a New Zealand equivalent to an IFRS where there is an equivalent differential reporting exemption in existing New Zealand GAAP.  In respect of disclosure requirements in a New Zealand equivalent to an IFRS which are not required in existing New Zealand GAAP, adopt the rebuttable presumption that the disclosure is not required because it was not required under existing New Zealand GAAP. Examples of situations where this presumption could be rebutted include where the disclosure is similar to disclosures required by other standards or is required as a consequence of new requirements in a New Zealand equivalent to an IFRS.  As a general rule propose that note disclosures of reconciliations between opening and closing asset and liability amounts should not be required.  Acknowledge that under New Zealand equivalents to IFRSs there is more focus on the primary financial statements and that the disclosures required to be made on the face of the financial statements may meet the information needs of the users of the financial statements of entities which qualify for differential reporting.  In respect of New Zealand equivalents to IFRSs which address issues not previously addressed in existing New Zealand GAAP, consider on a standard-by- standard basis whether qualifying entities should be required to comply with the new requirements. Proposals in Relation to Specific Standards The proposals in relation to each standard and interpretation are set out in ED-98. A summary of these proposals is set out in the next section of this Discussion Paper. The FRSB wishes to highlight proposals in relation to the following standards:  NZ IAS 7 Cash Flow Statements;  NZ IAS 24 Related Party Disclosures; and  NZ IAS 41 Agriculture. The proposals in relation to these standards are discussed below. NZ IAS 7 Cash Flow Statements Qualifying entities currently have a full exemption in relation to publishing a cash flow statement in accordance with FRS-10: Statement of Cash Flows. The FRSB proposes full compliance with NZ IAS 7 for the following reasons:  The cash flow statement is the statement which is most easily understood by infrequent users of financial statements.  Balance sheets and income statements are becoming more complex and in some cases involve a high level of judgement. The cash flow statement has remained relatively easy to understand and involves a low level of judgement.  The cash flow statement will provide a useful tool for analysing comparatives in a period of accounting policy change.
  7. 7. 7  The cash flow statement contains important information, some of which is not readily available from other financial statements. NZ IAS 24 Related Party Disclosures The proposed exemption is limited to disclosure of key management personnel compensation. The FRSB is concerned with ensuring that the users of the financial statements receive adequate information on an entity’s related party relationships and transactions, particularly given the potential impact of related party transactions on the reported financial performance and position of an entity. The FRSB notes that its proposal to withdraw the existing concession was previously raised in the context of ED-91 Related Party Disclosures (April 2002), which in turn was influenced by feedback from constituents in relation to ED-74 Related Party Disclosures (May 1994).  ED-74 proposed a continuation of the concessions in SSAP-22. Several submissions on ED-74 commented that the exemption from the Standard for qualifying entities should be removed. These submissions highlighted the importance of the disclosure of full related party information to users of the financial statements. They noted that small entities often placed significant reliance on related party relationships and the types of transactions that occurred between an entity and its related parties.  ED-91 proposed that entities that qualified for differential reporting exemptions in accordance with the Framework for Differential Reporting were to be exempt only from the requirements in paragraph 6.1 to disclose individual director remuneration. The position in ED-91 was influenced by ED-74. No standard was issued as a result of ED-91. The FRSB therefore considers that it is appropriate to reconsider the differential reporting concessions proposed in ED-91 in the context of NZ IAS 24. NZ IAS 41 Agriculture There is no specific financial reporting requirement that currently deals with accounting for biological assets and agricultural produce. NZ IAS 41 establishes new requirements in relation to biological assets and agricultural produce. The FRSB therefore considers it appropriate to consider concessions in respect of these requirements. The FRSB has received strong submissions that complying with NZ IAS 41 would result in significantly increased costs for many qualifying entities with little additional benefit. ED-98 therefore proposes partial exemption from the requirements of NZ IAS 41. ED-98 proposes that qualifying entities be permitted to:  measure each class of biological assets at fair value in accordance with paragraph 12 or at cost in accordance with paragraph 30. This concession applies even when the fair value of biological assets is reliably measurable.  measure each class of agricultural produce harvested from an entity’s biological assets at its fair value less estimated point-of-sale costs at the point of harvest in accordance with paragraph 13 or at cost. This concession applies even when the
  8. 8. 8 fair value less estimated point-of-sale costs at the point of harvest of agricultural produce harvested from an entity’s biological assets is reliably measurable. ED-98 also proposes disclosure concessions for qualifying entities. At present, qualifying entities with biological assets and agricultural produce account for such assets in a variety of ways. The FRSB is keen to assist industry representatives in developing alternative measurement models, for example developing guidance on the application of the cost model within an industry. The FRSB therefore encourages constituents to provide feedback to the FRSB regarding alternative measurement frameworks for qualifying entities. Summary of Proposed Concessions A summary of the proposals in relation to New Zealand equivalents to IFRSs is shown below. Specific Concessions A more detailed description of the specific concessions proposed in relation to each standard or interpretation is found in ED-98. It is proposed that a summary of the differential reporting concessions be inserted in the Introduction to each pronouncement. Where relevant, an asterisk(*) will be used to identify concessions. Marked-up copies of New Zealand equivalents to IFRSs showing the proposed differential reporting concessions are available on the Institute’s website. Rationale ED-98 outlines both the proposed concessions and the rationale for these concessions (shown as boxed text). The explanatory notes accompanying concessions do not form part of the proposed Framework. They are provided for information only and will not be reproduced in the final pronouncement. Full Exemption Any qualifying entity is granted full exemption from the following standards and interpretations. NZ IAS 14 Segment Reporting NZ SIC-29 Disclosure – Service Concession Arrangements Partial Exemption Qualifying entities are given partial exemption from the following standards and interpretations. NZ IAS 1 Presentation of Financial Statements NZ IAS 2 Inventories NZ IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors NZ IAS 11 Construction Contracts NZ IAS 12 Income Taxes NZ IAS 16 Property, Plant and Equipment NZ IAS 17 Leases NZ IAS 18 Revenue NZ IAS 19 Employee Benefits
  9. 9. 9 NZ IAS 21 The Effects of Changes in Foreign Exchange Rates NZ IAS 23 Borrowing Costs NZ IAS 24 Related Party Disclosures NZ IAS 28 Investments in Associates NZ IAS 32 Financial Instruments: Disclosure and Presentation NZ IAS 36 Impairment of Assets NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets NZ IAS 38 Intangible Assets NZ IAS 40 Investment Property NZ IAS 41 Agriculture NZ IFRS 4 Insurance Contracts6 NZ IFRS 5 Non-current Assets Held for Sale and Discontinued Operations NZ SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease NZ SIC-32 Intangible Assets – Web Site Costs Full Compliance (No Differential Reporting Concessions) Qualifying entities must comply with all the provisions in the following standards and interpretations. NZ IAS 7 Cash Flow Statements NZ IAS 10 Events after the Balance Sheet Date NZ IAS 20 Accounting for Government Grants and Disclosure of Government Assistance NZ IAS 26 Accounting and Reporting by Retirement Benefit Plans NZ IAS 27 Consolidated and Separate Financial Statements NZ IAS 29 Financial Reporting in Hyperinflationary Economies NZ IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions NZ IAS 31 Interests in Joint Ventures NZ IAS 33 Earnings per Share NZ IAS 34 Interim Financial Reporting NZ IAS 39 Financial Instruments: Recognition and Measurement NZ IFRS 1 First-time Adoption of New Zealand Equivalents to IFRSs NZ IFRS 2 Share-based Payment NZ IFRS 3 Business Combinations FRS-29: Prospective Financial Information FRS-39: Summary Financial Reports NZ SIC-7 Introduction of the Euro NZ SIC-10 Government Assistance – No Specific Relation to Operating Activities NZ SIC-12 Consolidation – Special Purpose Entities NZ SIC-13 Jointly Controlled Entities Non-Monetary Contributions by Venturers NZ SIC-15 Operating Leases – Incentives NZ SIC-21 Income Taxes – Recovery of Revalued Non-Depreciable Assets NZ SIC-25 Income Taxes – Changes in the Tax Status of an Entity or its Shareholders NZ SIC-31 Revenue – Barter Transactions Involving Advertising Services NZ IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities Impact of Proposals 6 The pronouncements which were recently made available on the Institute’s website as Pending Accounting Standards FRS-34A Life Insurance Entities and FRS-35A Financial Reporting of Insurance Activities are no longer separate standards. They are now appendices to NZ IFRS 4.
  10. 10. 10 The proposed differential reporting concessions will give entities currently qualifying for differential reporting, and a number of additional entities, the option of producing financial statements which have greatly reduced note disclosures relative to the full disclosure requirements of New Zealand equivalents to IFRSs. In a few circumstances the proposed concessions will also give qualifying entities the right to use alternative, less costly, measurement bases. The FRSB notes that although there appears to be a relatively high number of standards where full compliance is required, the scope of some of these standards means that few qualifying entities will be required to comply with the requirements of the standard. For example, the scope of NZ IAS 33 is limited to entities whose ordinary shares or potential ordinary shares are publicly traded and by entities that are in the process of issuing ordinary shares or potential ordinary shares in public market. Therefore few qualifying entities will fall within the scope of NZ IAS 33. The proposed withdrawal of the existing concessions in relation to cash flow statements and related party disclosures will lead to increased costs for some entities. The FRSB considers that, in the current reporting environment, the benefits of complying with the requirements of NZ IAS 7 and NZ IAS 24 outweigh increased costs. Because qualifying entities electing to apply differential reporting concessions will not meet all the requirements of IFRSs they will be unable to assert compliance with IFRSs. Disclosure Consistent with current practice, ED-98 proposes that entities taking advantage of differential reporting concessions disclose both the criteria which establish the entity as a qualifying entity and the extent to which the entity has applied these concessions. This requirement would be given effect by a consequential amendment to NZ IAS 8. Effective Date Adoption of this Framework for Differential Reporting will be permitted only when an entity complies with NZ IFRS 1 First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards for an annual accounting period beginning on or after 1 January 2005. The proposed differential reporting concessions will therefore be available for use by entities as they adopt New Zealand equivalents to IFRSs and comply with NZ IFRS 1 – whether that is in 2005, 2006 or 2007. The FRSB also proposes, by way of consequential amendment, to increase the size criteria for entities applying the existing Framework for Differential Reporting to the same levels.
  11. 11. 11 Increase in Size Criteria for Entities Continuing to Apply Existing NZ GAAP ED-98 contains a consequential amendment to the existing Framework for Differential Reporting which would increase the size criteria in that Framework. The FRSB is proposing to increase the size criteria for entities continuing to apply existing NZ GAAP so that an entity qualifies as large if it exceeds any two of the following: (a) total revenue of $20.0 (previously $5.0) million; (b) total assets of $10.0 (previously $2.5) million; (c) 50 employees (previously 20). The proposed size criteria are the same as those proposed for entities applying the New Zealand equivalents to IFRSs reporting regime. They are the size criteria in the MED Discussion Document Review of the Financial Reporting Act 1993 Part II (November 2004) (paragraph 255). The size criteria are subject to review if the MED subsequently changes the size criteria prior to finalisation of this Framework. The proposed increase in the size criteria should lead to a greater number of entities qualifying for differential reporting concessions. The FRSB is seeking comments on the proposed change in size criteria for entities continuing to apply existing NZ GAAP.
  12. 12. 12 Request for Comments The FRSB would welcome comment on the questions shown in the following table. Respondents providing additional comments are requested to cross reference comments to the relevant question. Respondent....................................................................................................................................... Answering on behalf of (please tick appropriate box and insert details of organisation/firm if relevant): Self  Organisation/Firm  Name of Organisation/Firm.............................................................................................................. Address of Organisation/Firm.......................................................................................................... ............................................................................................................ ............................................................................................................ No Request for Comments ED-98 yes no . Entities Applying the New Zealand Equivalents to IFRSs Reporting Regime 1 Size Criteria Do you agree with the proposed criteria for determining whether an entity is large? The criteria proposed in ED-98 are: (a) total income of $20.0 (previously $5.0) million; (b) total assets of $10.0 (previously $2.5) million; (c) 50 employees (previously 20). An entity is deemed to be large if it exceeds any two of the above criteria. The size criteria are subject to review if the MED subsequently changes the size criteria prior to finalisation of this Framework. Specific Proposals Do you agree with the differential reporting concessions proposed in respect of each of the following standards or interpretations? 2 NZ IAS 1 Presentation of Financial Statements 3 NZ IAS 2 Inventories 4 NZ IAS 7 Cash Flow Statements Do you support withdrawing the existing concession for qualifying entities in relation to cash flow statements? That is, do you support requiring qualifying entities to prepare a cash flow statement in accordance with NZ IAS 7 Cash Flow Statements. Arguments for and against this proposal are sought 5 NZ IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 6 NZ IAS 10 Events after the Balance Sheet Date 7 NZ IAS 11 Construction Contracts 8 NZ IAS 12 Income Taxes 9 NZ IAS 14 Segment Reporting 10 NZ IAS 16 Property, Plant and Equipment 11 NZ IAS 17 Leases 12 NZ IAS 18 Revenue 13 NZ IAS 19 Employee Benefits 14 NZ IAS 20 Accounting for Government Grants and Disclosure of Government Assistance 15 NZ IAS 21 The Effects of Changes in Foreign Exchange Rates 16 NZ IAS 23 Borrowing Costs 17 NZ IAS 24 Related Party Disclosures Do you support withdrawing the concession for qualifying entities to make only limited disclosure in respect of related party relationships and transactions. That is, do you support requiring qualifying entities to comply with all the requirements of NZ IAS 24 Related Party Disclosures except for disclosure of key management personnel compensation? Arguments for and against this proposal are sought.
  13. 13. 13 18 NZ IAS 26 Accounting and Reporting by Retirement Benefit Plans 19 NZ IAS 27 Consolidated and Separate Financial Statements 20 NZ IAS 28 Investments in Associates 21 NZ IAS 29 Financial Reporting in Hyperinflationary Economies 22 NZ IAS 30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions 23 NZ IAS 31 Interests in Joint Ventures 24 NZ IAS 32 Financial Instruments: Disclosure and Presentation 25 NZ IAS 33 Earnings per Share 26 NZ IAS 34 Interim Financial Reporting 27 NZ IAS 36 Impairment of Assets 28 NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets 29 NZ IAS 38 Intangible Assets 30 NZ IAS 39 Financial Instruments: Recognition and Measurement 31 NZ IAS 40 Investment Property 32 NZ IAS 41 Agriculture (a) Do you support the proposal to permit qualifying entities to measure biological assets at either fair value (in accordance with NZ IAS 41) or cost? (b) Do you support the proposal to permit qualifying entities to measure agricultural produce harvested from an entity’s biological assets shall be measured at its fair value less estimated point-of-sale costs at the point of harvest or cost? The FRSB seeks respondents’ views on the most appropriate method of determining the carrying amounts of biological assets and agricultural produce at the point of harvest. 33 NZ IFRS 1 First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards 34 NZ IFRS 2 Share-based Payment 35 NZ IFRS 3 Business Combinations 36 NZ IFRS 4 Insurance Contracts 37 NZ IFRS 5 Non-current Assets Held for Sale and Discontinued Operations 38 NZ SIC-7 Introduction of the Euro 39 NZ SIC-10 Government Assistance – No Specific Relation to Operating Activities 40 NZ SIC-12 Consolidation – Special Purpose Entities 41 NZ SIC-13 Jointly Controlled Entities Non-Monetary Contributions by Venturers 42 NZ SIC-15 Operating Leases – Incentives 43 NZ SIC-21 Income Taxes – Recovery of Revalued Non-Depreciable Assets 44 NZ SIC-25 Income Taxes – Changes in the Tax Status of an Entity or its Shareholders 45 NZ SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease 46 NZ SIC-29 Disclosure – Service Concession Arrangements 47 NZ SIC-31 Revenue – Barter Transactions Involving Advertising Services 48 NZ SIC-32 Intangible Assets – Web Site Costs 49 NZ IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities General Questions 50 Do you consider that the proposals in the Exposure Draft need to be adapted to allow public benefit entities to comply with requirements in the Exposure Draft 51 Do you consider there are any regulatory issues or other issues arising in the New Zealand environment that may affect the implementation of the proposals, particularly any issues relating to: a) public benefit entities; b) profit-oriented entities; and
  14. 14. 14 c) the Privacy Act 1993? 52 Do you agree that adoption of the proposals in the exposure draft in New Zealand equivalents to IFRSs is in the best interests of users of general purpose financial reports in New Zealand? Accounting for Changes in Accounting Policies 53 Do you agree that a profit-oriented entity ceasing to apply differential reporting concessions and thereby required to assert compliance with IFRSs (in accordance with NZ IAS 1, paragraph 14) should be required to account for the change in accounting policies in accordance with both NZ IAS 8 and IFRS 1 (refer ED-98, paragraph 5.8)? Consequential Amendments 54 Do you agree that the proposed consequential amendments to specific standards will give effect to the proposals as outlined in the Discussion Paper? Entities Continuing to Apply Existing NZ GAAP 55 Do you agree with the proposed increase in size criteria for determining whether an entity is large? The criteria in ED-98 are: (a) total income of $20.0 (previously $5.0) million; (b) total assets of $10.0 (previously $2.5) million; (c) 50 employees (previously 20)? (Note that if an entity exceeds any two of the above criteria it is deemed to be large).

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