On 14 November 2019, the Reporting and Assurance Team lodged a submission to the Chief Executive of the External Reporting Board on the discussion paper: Targeted Review of the New Zealand Accounting Standards Framework.

The Accounting Standards Framework (ASF) sets out the External Reporting Board’s (XRB) strategy for developing accounting standards for those entities that are required by law to prepare financial statements in accordance with standards issued by the XRB (otherwise known as general purpose financial reports – GPFR). Such entities include public sector entities, all registered charities and certain other NFP entities, as well as certain companies and other for-profit entities.

Since the ASF has been effective for 4-5 years for many entities, the XRB considered it timely and important to “check-in” with stakeholders and issued a Discussion Paper for public consultation in July 2019.

The feedback we heard from members indicates that the ASF is generally working well,although the XRB should do whatever is procedurally necessary to ensure that it is able to promptly address local issues. Another consideration raised is possible legislative moves to introduce asset thresholds for who needs to prepare GPFR, and the desire to avoid the ASF and legislation becoming inconsistent in this regard.