The New Zealand The New Zealand International Financial Reporting International Financial Reporting

Standards Standards [NZIFRS][NZIFRS]

How they might affect your tertiary organisation…

Jeff LongDirector FinanceUniversity of Canterbury

30 years in the making…30 years in the making…

• Single set of international financial reporting standards (IASB)

• NZ Accounting Standards Review Board (ASRB)

• Applies from 1 January 2007

How this affects you How this affects you NOWNOW!!

• 2007 is really 2005

• Comparative reporting of previous year required

• 2005 adjustments can go against retained earnings

A stable platform…A stable platform…

• 36 standards

• 12 interpretation statements

Who is involved?Who is involved?

• New Zealand Institute of Chartered Accountants (NZICA)

• NZ Treasury• Office of the Auditor General• Deloitte• KPMG• Ernst Young• PricewaterhouseCoopers

For TEIs this will mean changes…For TEIs this will mean changes…

NZ IAS: 17 Leases

• Leases on equipment

• Leases on land and buildings

NZ IAS 18: Revenue RecognitionNZ IAS 18: Revenue Recognition

• When is revenue counted as revenue?

• Recommend ‘stage of completion’ approach rather than time of receipt

• Any “excess income ?”

NZ IAS 19: Employee BenefitsNZ IAS 19: Employee Benefits

• Long service leave

• Study / Research leave

• Sick leave

NZ IAS 24: Related Parties NZ IAS 24: Related Parties DisclosureDisclosure

• Council, other elected members & the Vice Chancellor

• Key management personnel

• “Authority and responsibility for planning, directing, and controlling activities, directly or indirectly, including any Director.”

NZ IAS 36: Asset ImpairmentNZ IAS 36: Asset Impairment

• Impairment

• Net selling price, or

• Value in use: future cash flows

• Cash Generating Units (CGU)

A Positive!A Positive!Depreciated replacement cost (DRC)

A worry!A worry!Impairment may relate to …

• asset obsolescence or

• an asset wearing out or

• asset damage or

• changes in use

NZ IAS 40: Investment PropertyNZ IAS 40: Investment Property

• Exceptions for PBEs• But what about…• Changes to ‘fair value’

IFRSIFRSa good thing?

Fortunately NZ GAAP is well developed!

But…