Public Benefit Entities: New Accounting Standards issued
The New Zealand Accounting Standards Board (“NZASB”) has issued a suite of standards for public benefit entities (“PBEs”) that address the manner in which to account for relationships with other entities. The new standards are:
- PBE IPSAS 34 Separate Financial Statements
- PBE IPSAS 35 Consolidated Financial Statements
- PBE IPSAS 36 Investments in Associates and Joint Ventures
- PBE IPSAS 37 Joint Arrangements
- PBE IPSAS 38 Disclosure of Interests in Other Entities.
These standards supersede:
- PBE IPSAS 6 Consolidated and Separate Financial Statements
- PBE IPSAS 7 Investments in Associates
- PBE IPSAS 8 Interests in Joint Ventures.
Adoption of these new standards will result in closer alignment between PBE Standards and New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”). These new standards are effective for annual financial reporting periods beginning on or after 1 January 2019 and earlier application is permitted.
The NZASB has also issued another new standard for PBEs, PBE IFRS 9 Financial Instruments (“PBE IFRS 9”), which is effective for annual financial reporting periods beginning on or after 1 January 2021. Earlier adoption is permitted. Once entities applying NZ IFRS have adopted NZ IFRS 9 Financial Instruments, PBE IFRS 9 will be of assistance to mixed groups (which consist of both for-profit entities and PBEs), as it will allow all entities in the group to apply essentially identical requirements when accounting for financial instruments.
We’ll examine each of these new standards in future editions of Accounting Alert.
For more on the above, please contact your local BDO representative.