Adoption Of Intl. Financial Reporting Standards
For immediate release 18 December 2003
International Financial Reporting Standards
– Exposure Draft Based On Ias 16 Property, Plant And Equipment
The Financial Reporting Standards Board of the Institute of Chartered Accountants of New Zealand has issued for comment an exposure draft of NZ IAS 16 Property, Plant and Equipment.
ED NZ IAS 16 is part of the move to adopt International Financial Reporting Standards by 1 January 2007 (with voluntary compliance from 1 January 2005). ED NZ IAS 16 adopts all the requirements of IAS 16. In addition the FRSB has proposed the following additional guidance and requirements relating to:
- examples of property plant and
equipment held by public benefit entities;
- accounting by public benefit entities for donated and subsidised property, plant and equipment;
- determining depreciated replacement cost by public benefit entities; and
- the conduct of valuations and valuation disclosures required by all entities.
In developing the above additional items the FRSB considered the current New Zealand standard, FRS-3 Property, Plant and Equipment and International Public Sector Accounting Standard 17 Property, Plant and Equipment (IPSAS 17).
The Exposure Draft and Discussion Paper 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 28 February 2004.
- The Financial Reporting Standards Board (FRSB) is implementing the Accounting Standards Review Board’s (ASRB) decision to adopt International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).
- Application of the standards will be to reporting 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).
- The ASRB and the FRSB have agreed that there should be one set of standards for application by both profit-oriented and public benefit entities. However, IFRS are developed for application by profit-oriented entities. As a consequence, the FRSB intends to adopt IFRS but, where necessary, introduce additional material to the standards to ensure that they can be applied in the New Zealand environment by all reporting entities. The resulting New Zealand standards will be referred to as NZ IFRSs or NZ IASs, as appropriate.
- The IASB is currently revising the existing international standards and the FRSB will issue drafts of the New Zealand standards as the international standards are finalised or near to being finalised. The FRSB is also issuing drafts of New Zealand standards adapted from new international standards. The FRSB aims to complete by June 2004 the conversion process of both existing international standards and new standards issued by the IASB through to March 2004. In total, close to 40 exposure drafts will be issued.
- The objectives of the FRSB’s exposure of the proposed New Zealand standards are:
- to ensure reasonable steps are taken to obtain submissions from persons or organisations or their representatives who will be affected by the adoption of the standard and, in particular, by the proposed New Zealand specific changes to the international standard;
- to identify issues in relation to the international standard that the FRSB should raise with the IASB; and
- to alert constituents to changes in financial reporting as a result of adoption of international standards.