Still Time to Comment on Draft Interpretations
For immediate release 20 February 2004
Still Time to Comment on Accounting Interpretations Discussion Papers
and Draft Interpretations
There is still time for interested parties to comment on the Discussion Papers for two International Accounting Standards Board (IASB) Draft Interpretations released by the Financial Reporting Standards Board in January.
The proposed New Zealand IFRIC Interpretations will, in all material respects, be the same as the proposed IFRIC* Interpretations. It is therefore vital that the FRSB and New Zealand constituents contribute to the international debate and to influence the IASB in the development and finalisation of this IFRIC Interpretation.
The two Draft Interpretations are:
IFRIC Draft Interpretation D3 Determining whether an Arrangement contains a Lease - IFRIC Draft Interpretation D3 provides guidance on how to determine whether an arrangement is, or contains, a lease as defined in IAS 17 Leases; when the assessment or a reassessment of whether an arrangement contains a lease should be made; and if an arrangement contains a lease, how the payments for the lease should be separated from other payments in the arrangement.
IFRIC Draft Interpretation D4 Decommissioning, Restoration and Environmental Rehabilitation Funds - The draft Interpretation deals with how to account for decommissioning, restoration and environmental rehabilitation funds. The purpose of these funds is to segregate assets to fund some or all of the costs of decommissioning of plant (such as a nuclear plant) or certain equipment (such as cars), or in undertaking environmental rehabilitation (such as rectifying pollution of water or restoring mined land). These funds may be established voluntarily or required by regulation or law.
The most effective way to ensure that all issues are being considered, including issues relevant to New Zealand, in the development and finalisation of these Interpretations is for constituents to submit comments on the IFRIC Draft Interpretations D3 and D4 to the FRSB and the IASB respectively.
The closing date for submissions on the above Exposure Drafts is 1 March 2004.
* IFRIC - International Financial Reporting Interpretations Committee
- The Financial Reporting Standards Board (FRSB) is implementing the Accounting Standards Review Board's (ASRB) decision to adopt International Financial Reporting Standards (IFRSs) 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 New Zealand standards should continue to apply to both profit-oriented and public benefit entities. Standards issued by the IASB apply only to profit-oriented entities. As a consequence, the FRSB intends, where necessary, to introduce additional material to the international standards to ensure that they can be applied in the New Zealand environment by all reporting entities. The resulting standards will be referred to as NZ IFRS or NZ IASs, as appropriate.
- The objectives of the FRSB's exposure of IFRS are:
- to ensure reasonable steps are taken to obtain submissions from persons or organisation 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 accounting 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.