NZ IFRS 9 Financial Instruments
Effective date - periods beginning on or after: 1 January 2013
Standard issued in November 2009 (NZ IFRS 9 (2009))
NZ IFRS 9 (2009) is the first standard issued as part of a wider project to
replace NZ IAS 39.
NZ IFRS 9 (2009) retains but simplifies the mixed measurement model
and establishes two primary measurement categories for financial assets:
amortised cost and fair value. The basis of classification depends on the
entity’s business model and the contractual cash flow characteristics of the
financial asset. The guidance in NZ IAS 39 on impairment of financial assets
and hedge accounting continues to apply.
Prior periods need not be restated if an entity adopts the standard for
reporting periods beginning before 1 January 2012.
Standard issued in October 2010 (IFRS 9 (2010))
NZ IFRS 9 (2010) adds the requirements related to the classification and
measurement of financial liabilities, and derecognition of financial assets and
liabilities to the version issued in November 2009.
It also includes those paragraphs of NZ IAS 39 dealing with how to measure
fair value and accounting for derivatives embedded in a contract that
contains a host that is not a financial asset, as well as the requirements of
IFRIC 9 Reassessment of Embedded Derivatives.
The impact of these amendments on the Authority’s financial statements has
not yet been determined.
The Minister of Commerce has approved a new Accounting Standards Framework
(incorporating a Tier Strategy) developed by the External Reporting Board (XRB).
Under this Accounting Standards Framework, the Authority is classified as a Tier 2
reporting entity and it will be required to apply Public Benefit Entity Accounting
Standards (PAS) with reduced disclosure requirements. These standards are being
developed by the XRB based on current International Public Sector Accounting
Standards. The effective date for the new standards for public sector entities
is expected to be for reporting periods beginning on or after 1 July 2014. This
means the Authority expects to transition to the new standards in preparing its
30 June 2015 financial statements. As the PAS are still under development, the
Authority is unable to assess the implications of the new Accounting Standards
Framework at this time.
Due to the change in the Accounting Standards Framework for public benefit
entities, it is expected that all new NZ IFRS and amendments to existing NZ
IFRS will not be applicable to public benefit entities. Therefore, the XRB has
effectively frozen the financial reporting requirements for public benefit entities
up until the new Accounting Standard Framework is effective. Accordingly, no
disclosure has been made about new or amended NZ IFRS that exclude public
benefit entities from their scope.
Presentation of Items of Other Comprehensive Income (Amendments to NZ IAS 1)
Effective date - periods beginning on or after: 1 July 2012
The amendments:
- require that an entity present separately the items of other comprehensive
income that would be reclassified to profit or loss in the future if certain
conditions are met from those that would never be reclassified to profit or
loss;
- do not change the existing option to present profit or loss and other
comprehensive income in two statements; and
- change the title of the statement of comprehensive income to the statement
of profit or loss and other comprehensive income. However, an entity is still
allowed to use other titles.
The amendments do not address which items are presented in other
comprehensive income or which items need to be reclassified. The requirements
of other IFRSs continue to apply in this regard.
Waikato River Authority Annual Report
2012
19