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Practice Note – Prospective Financial Information

News Release
25 August 2005

Practice Note – Prospective Financial Information in Offer Documents

The Securities Commission issued a Practice Note last year on prospective financial information in offer documents. The Practice Note is to assist people preparing offer documents during the transition period before international financial reporting standards are adopted.

Practice Note 2/04 sets out the approach the Commission will take in relation to offer documents during the transition period, to ensure an appropriate level of information is provided to investors.

The Commission has amended Practice Note 2/04 to clarify two aspects. They are:

- the NZ IFRS standards that an issuer should apply in respect of a prospective period are those that the issuer expects to apply for the period in question; and

- the Commission does not expect issuers to reconcile prospective financial information between NZ GAAP and NZ IFRS unless the prospectus contains prospective financial information for an accounting period after the issuer’s expected adoption date for NZ IFRS.

The Commission’s core expectations for offer documents in the Practice Note remain unchanged. They are:

- prospective financial information for any future accounting period should be prepared on the basis of the accounting policies that the issuer expects to apply in that accounting period; and

- NZ GAAP information should be reconciled to NZ IFRS where a prospectus, registered before an issuer adopts NZ IFRS, contains NZ GAAP prospective or historical financial information for the transition period as well as prospective financial information prepared under NZ IFRS.

The amended practice note is available on the Commission’s website,


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