Adoption Of International Accounting Standards
For immediate release 7 November 2003
Adoption Of International Accounting Standards - Latest Update
Release Of Ifrs 1
The Financial Reporting Standards Board (FRSB) has released a new Exposure Draft, ED NZ IFRS 1, for public comment.
The release continues the New Zealand accounting profession's move to adopt the International Financial Reporting Standards (IFRS) framework by 1 January 2007, with voluntary compliance from 1 January 2005.
ED NZ IFRS 1 is fundamental to the adoption of IFRSs and its application is essential for entities wishing to assert compliance with IFRSs. The proposed standard will apply when an entity adopts NZ IFRSs for the first time. It will apply to an entity's first NZ IFRS financial statements, comparative financial statements and each interim financial report, if any, presented for part of the period covered by its first NZ IFRS financial statements.
ED NZ IFRS 1 requires an entity adopting NZ IFRSs for the first time to include an explicit and unreserved statement of compliance with NZ IFRSs. In general, it requires a first-time adopter to use the same accounting policies in its opening balance sheet and throughout all periods presented in its first NZ IFRS financial statements. The accounting policies must comply with each NZ IFRS effective at the reporting date for its first NZ IFRS financial statements. In general, the ED requires retrospective application of NZ IFRSs for all the periods presented.
ED NZ IFRS 1 requires a first-time adopter to do the following in its opening IFRS balance sheet:
- recognise all assets and liabilities whose recognition is required by NZ IFRSs;
- not recognise items as assets or liabilities if NZ IFRSs do not permit such recognition;
- classify all recognised assets and liabilities in accordance with NZ IFRSs; and
- apply NZ IFRSs in measuring all recognised assets and liabilities.
ED NZ IFRS 1 grants a first-time adopter limited exemptions in specified areas where the costs of compliance would be likely to exceed the benefits to users of financial statements. The ED does not provide for exemptions from presentation and disclosure requirements of other NZ IFRSs.
The Exposure Draft and Discussion Paper for the proposed standard are available for download free of charge from the Institute of Chartered Accountants' website at www.icanz.co.nz.
The closing date for submissions on the Exposure Draft is 31 January 2004.