The New Public Benefit Entity
(PBE) Reporting Framework
Your one stop guide for preparing for the first-time adoption of
the new PBE Accounting Standards required for Public Sector
Entities and Registered Charities (and any NFP who chooses to
prepare annual financial statements in accordance with GAAP).
Audit | Tax | Advisory
Contents
Foreword.............................................................................................................................. 1
1. Who is required to report under the new PBE Framework? ............................................ 2
1.1 Financial Reporting Act 2013 ................................................................................................................ 2
1.2 Public Benefit Entities ............................................................................................................................ 2
2. The Public Benefit Entity Reporting Framework ............................................................. 4
3. Status of new PBE Accounting Standards ...................................................................... 6
4. The transition timeframe and process ............................................................................. 6
4.1 Transition Timeframe............................................................................................................................. 6
4.2 First-time-adoption................................................................................................................................. 6
5. Similarities between PBE Accounting Standards and NZ IFRS ...................................... 8
6. Planning for transition to the new PBE Framework ....................................................... 10
Appendix I
Differences between PBE Standards and NZ IFRS ...................................... 12
Appendix II
Differences between PBE Accounting Standards and old NZ GAAP ......... 29
Appendix III
Application Study – Accounting for grant income ....................................... 34
Foreword
Over the past 7 years there has been extended debate and review of the most appropriate source of
accounting standards for Public Benefit Entities (PBEs) in New Zealand. The adoption of New Zealand
equivalents to International Financial Reporting Standards (NZ IFRS) in November 2004 was viewed at the
time as the achievement of the “holy grail” of accounting, a one-size-fits-all approach to financial reporting.
Since the adoption of NZ IFRS this approach has proven impractical and has not met the objective of
providing transparent and useful information to the users of financial statements in all sectors. As a result we
have now moved to a multi-standard approach to financial reporting.
These discussions have ultimately resulted in the development of a new Financial Reporting Framework (the
“Framework”) approved by the External Reporting Board in March 2012. The new Framework will introduce
different financial reporting requirements (i.e. different sets of rules) for for-profit entities and PBEs. For-profit
entities will continue to report under NZ IFRS but PBEs, both public sector and private not-for-profits, will
have to transition to a new suite of accounting standards, called PBE Accounting Standards. The PBE
Accounting Standards are based on International Public Sector Accounting Standards (IPSAS).
We expect the adoption of IPSAS based standards will not be a significant challenge for PBEs currently
reporting under NZ IFRS. However for PBEs reporting under either old NZ GAAP or another form of Special
Purpose Financial Reporting the transition will be significant. There are a number of differences between the
frameworks that need to be worked through; the impact of these differences will be largely determined by the
nature of the reporting entity.
This publication provides a one stop guide for PBEs planning the transition from preparing annual financial
statements in accordance with NZ IFRS (or old NZ GAAP) to the new IPSAS based PBE Accounting
Standards. It is specifically applicable for those PBEs required to report under either Tier 1 or 2 of the PBE
Financial Reporting Framework (i.e. those entities or groups with annual expenditure exceeding $2 million).
Crowe Horwath is committed to ensuring a smooth transition for all our PBE clients switching to the new PBE
Standards. We welcome the opportunity to discuss the content of this publication with you and your
implementation plan.
Les Foy
Managing Principal
Tel 04 587 0823
Cell 021 471 828
les.foy@crowehorwath.co.nz
Anthony Heffernan
Associate Principal
Tel 04 587 0889
Cell 027 311 6446
Anthony.heffernan@crowehorwath.co.nz
Crowe Horwath New Zealand Audit Partnership is a member of Crowe Horwath International, a Swiss verein. Each member of Crowe Horwath is a
separate and independent legal entity.
1. Who is required to report under the new
PBE Framework?
1.1 Financial Reporting Act 2013
The Financial Reporting Act 2013 (the “Act”) was passed on December 2013 and stipulates which entities
are required to prepare general purpose annual financial statements from a statutory perspective. The
effective date of the Act is provided in Section 4.
General purpose financial statements are defined as financial statements prepared in compliance with
generally accepted accounting practice (GAAP). The XRB under the Financial Reporting Act 1993 has
the authority to define GAAP through the issuing of accounting standards and maintaining a Financial
Reporting Framework.
In summary the Act will:
 continue to require all Public Sector Entities to prepare general purpose financial statements and;
 introduce a new requirement for all registered charities and certain other not-for-profit entities to
prepare general purpose financial statements.
Public Sector Entities are defined in the Public Audit Act 2001 (entities that are audited by the
Auditor-General), and all Officers of Parliament.
Examples of public sector entities include central government, local governments, universities and
district health boards.
It is important to highlight the Act does not include mandatory financial reporting requirements for all notfor-profit entities. In general Incorporated Societies and Charitable Trusts who are not registered charities
continue to have no statutory GAAP financial reporting requirements. Individual entities will need to
consider the provisions of the Act carefully to assess whether they are subject to its requirements.
1.2 Public Benefit Entities
Under the new Framework approved by the New Zealand External Reporting Board (XRB), the reporting
requirements have been separated for for-profit entities and PBEs. It is critical that a reporting entity is
correctly classified as either a for-profit entity or a PBE for financial statement reporting purposes. If
Group financial statements are prepared the assessment is based on the primary activities of the Parent.
2
PBEs are entities whose primary objective is to provide goods or services for community or social
benefit and where any equity has been provided with a view of supporting that primary objective
rather than for a financial return to equity holders.
PBEs include public sector but also private sector not-for-profits.
Reporting entities are currently required to classify themselves as either a for-profit entity or a PBE, and
we do expect this classification to change. We suggest entities will take the opportunity to review their
current classification to ensure it continues to be appropriate given the move to separate standards for
each sector.
A PBE preparing financial statements in accordance with GAAP must prepare their financial statements in
accordance with new Public Benefit Entity Reporting Framework once effective (refer to section 4).
3
2. The Public Benefit Entity Reporting
Framework
Under the new PBE Framework the basis for preparation of GAAP financial statements will be determined by
the size of the reporting entity, measured by annual expenditure.
The XRB has created 4 Tiers to define GAAP financial reporting requirements for PBEs.
Tier
PBE Tier Criteria
PBE Accounting Standards
1
Publicly accountable PBEs or
PBEs and annual expenditure over $30M
Full PBE Accounting Standards (NZ IPSAS)
2
Non-publicly accountable PBEs and
annual expenditure between $2M and $30M
PBE Accounting Standards with RDR
3
Non-publicly accountable PBEs and
annual expenditure between $125K and $2M
PBE Simple Format Reporting – accrual
based
4
Non-publicly accountable PBEs and
annual expenditure less than $125K
PBE Simple Format Reporting - cash based
A reporting entity may move between tiers due to changes in expenditure when specific additional criterion
within the Framework is satisfied.
Expenditure
Expenses are the total expenses recognised in the Statement of Financial
Performance (and therefore include grants and donations). The size criterion
is applied on a group basis comprising the parent and all its controlled entities
(if any).
Public Accountability
All PBEs regardless of size are classified as Tier 1 entities if classified as
publicly accountable.
An entity is defined as publicly accountable if:
a. its debt or equity is traded in a public market or is in the process of issuing
such instruments; or
b. it holds assets in a fiduciary capacity from a broad group of outsiders as one
of its primary businesses.
The following entities are always deemed to be publicly accountable:
a. Issuers – as defined by the Securities Act 1978
b. Registered banks – as defined by the Reserve Bank Act 1989
c. Registered Superannuation Scheme – as defined by Superannuation
Schemes Act 1989
NZ IPSAS
IPSAS is an international set of financial reporting standards, closely aligned
with International Financial Reporting Standards (IFRS) and adapted for the
requirements of the public sector, with the primary aim of addressing not-forprofit accounting situations. It is proposed a modified version of IPSAS be
4
developed in New Zealand (NZ IPSAS) with further guidance and
amendments for not-for-profit entities.
RDR
Entities reporting in accordance with NZ IPSAS with RDR will apply the same
set of standards at Tier 1 entities, except they will have significant reduced
disclosure requirements (RDR). Under RDR the Statement of Cash Flows is
still mandatory there are no exemptions.
Simple Format Reporting Simple Format Reporting is a new form of GAAP that has been proposed for
public benefit entities with less than $2 million annual expenditure. Accrual
accounting will be encouraged and required disclosures significantly reduced.
Financial statements will be prepared in accordance with fill-in-the-box
template financial statements.
5
3. Status of new PBE Accounting Standards
The standards for PBEs under the new Framework are expected to be rolled out during 2013 – 2014, with the
new framework effective for accounting periods commencing on or after 1 April 2015.
The XRB Board plans to issue exposure drafts (ED) and then finalise and issue the suites of standards.
Different release and submission dates will apply to each stage.
PBE
Standards
PBE Public Sector
PBE NFP Sector
Tier 1
Full PBE Accounting Standards (NZ
IPSAS)

Issued May 2013
ED - Q4 2013
Final – Q4 2014
Tier 2
PBE Standards with RDR

Issued May 2013
ED - Q4 2013
Final – Q4 2014
Tier 3
PBE Simple Format Reporting
Accrual

Issued November 2013

Issued November 2013
Tier 4
PBE Simple Format Reporting Cash

Issued November 2013

Issued November 2013
In May 2013 the XRB issued a set of forty final standards for Tier 1 and Tier 2 Public Sector PBEs; and in
November 2013 the same suite of standards was issued for not-for-profit PBES in Exposure Draft.
The final standards and the EDs are all available to review on the XRB website – www.XRB.org.nz
4. The transition timeframe and process
4.1 Transition Timeframe
The effective date of the new PBE Framework is accounting periods beginning on or after the following
dates:
 Public Sector PBEs – 1 July 2014
 Not-for-profit PBEs – 1 April 2015 (early adoption available)
4.2 First-time-adoption
In the first year of preparing financial statements in accordance with the PBE Framework, the reporting
entity must apply consistent accounting policies to all periods reported, including comparatives.
6
Therefore a Public Sector PBE with a 30 June balance date; will be required to present its first annual
financial statements prepared in accordance with PBE Standards for the year ended 30 June 2015,
together with:
 30 June 2014 – balance sheet and profit and loss comparatives; and
 30 June 2013 – balance sheet, prepared in accordance with the PBE Standards.
Transitioning to PBE standards should be reasonably straightforward if you are currently reporting
under NZ IFRS. The large majority of the recognition and measurement requirements between the
two frameworks are consistent.
The NFP sector is given an additional year to complete the transition to the new PBE Accounting
Standards.
7
5. Similarities between PBE Accounting
Standards and NZ IFRS
The development of the PBE Accounting Standards by the XRB has been focused on ensuring differences
between PBE standards (NZ IPSAS) and For-Profit Standards (NZ IFRS) were kept minimal. Upon issing the
new suite of Public Sector PBE Standards, the XRB confirmed there is almost no “unnessary differences”.
Summary Table of Differecnes
Impact

Differences are minor or limited to terminology differences

Differences are limited to additional disclosures

Differences in recognition and measurement of financial elements – but scope is fairly limited

Differences in recognition and measurement of financial elements – widespread impact expected
PBE Standards
NZ IFRS equivalent
Impact
Appendix I
PBE IPSAS 1
Presentation of Financial Statements
NZ IAS 1

1.1
PBE IPSAS 2
Cash Flows Statements
NZ IAS 7

1.2
PBE IPSAS 3
Accounting Policies, Changes in
Accounting Estimates and Errors
NZ IAS 8

PBE IPSAS 4
The Effects of Changes in Foreign
Exchange Rates
NZ IAS 21

PBE IPSAS 5
Borrowing Costs
NZ IAS 23

PBE IPSAS 6
Consolidated and Separate Financial
Statements
NZ IAS 27

1.4
PBE IPSAS 7
Accounting for Investments in Associates
NZ IAS 28

1.5
PBE IPSAS 8
Interests in Joint Ventures
NZ IAS 31

PBE IPSAS 9
Revenue from Exchange Transactions
NZ IAS 18

PBE IPSAS 10
Financial Reporting in Hyperinflationary
Economies
NZ IAS 29

PBE IPSAS 11
Contruction Contracts
NZ IAS 11

1.7
PBE IPSAS 12
Inventories
NZ IAS 2

1.8
PBE IPSAS 13
Leases
NZ IAS 17

PBE IPSAS 14
Events After the Reporting Date
NZ IAS 10

PBE IPSAS 16
Investment Property
NZ IAS 40

1.3
1.6
8
PBE Standards
NZ IFRS equivalent
Impact
Appendix I
PBE IPSAS 17
Property, Plant and Equipment
NZ IAS 16

PBE IPSAS 19
Provisions, Contingent Liabilities and
Contingent Assets
NZ IAS 37

PBE IPSAS 20
Related Party Disclosures
NZ IAS 24

PBE IPSAS 21
Impairment of Non-Cash-Generating
Assets
NZ IAS 36

PBE IPSAS 23
Revenue from Non-Exchange
Transactions
No equivalent

1.11
PBE IPSAS 25
Employee Benefits
NZ IAS 19

1.12
PBE IPSAS 26
Impairment of Cash-Generating Assets
NZ IAS 36

PBE IPSAS 27
Agriculture
NZ IAS 41

1.13
PBE IPSAS 28
Financial Instruments: Presentation
NZ IAS 32

1.14
PBE IPSAS 29
Financial Instruments: Recognition and
Measurement
NZ IAS 39

1.14
PBE IPSAS 30
Financial Instruments: Disclosures
NZ IFRS 7

1.14
PBE IPSAS 31
Intangible Assets
NZ IAS 38

1.15
PBE IPSAS 32
Service Concession Arrangements
Grantor
No equivalent

Not applicable
PBE IFRS 3
Business Combinations
NZ IFRS 3

No differences
PBE IFRS 4
Insurance Contracts
NZ IFRS 4

No differences
PBE IFRS 5
Non-Current Assets Held for Sale and
Discontinued Operatons
NZ IFRS 5

No differences
PBE IAS 12
Income Taxes
NZ IAS 12

No differences
PBE IAS 34
Interim Financial Reporting
NZ IAS 34

No differences
PBE FRS 42
Prospective Financial Reporting
NZ FRS 42

No differences
PBE FRS 43
Summary Financial Statements
NZ FRS 43

No differences
PBE FRS 46
First-time adoption of PBE Standards by
Entities Previously Applying NZ IFRSs
No equivalent

First-time
adoption
PBE FRS 47
First-time adoption of PBE Standards by
Entities Other Than Those Previously
Applying NZ IFRSs
No equivalent

First-time
adoption
1.9
1.10
9
6. Planning for transition to the new PBE
Framework
In our experience the effective implementation of a new financial reporting framework such as the PBE
Accounting Standards requires advance planning. It is critical that you are supported by people with the
necessary knowledge and experience applying the IPSAS based standards in practice. A working knowledge of
the standards will reduce the level of effort and resources required to complete the transition.
Our experience on similar projects has confirmed that any change to your annual financial statements will also
results in changes to staff training requirements, systems to track additional information, and related internal
controls.
Our conversion methodology involves a four-phased approach designed to implement the changes across the
entire organisation.
Phase 1
Phase 2
Phase 3
Scoping and planning
Solution development
Implementation
Phase 3
Phase 4
Follow - upFollow-up
Transactional accounting
Non -routine accounting
Identify
applicable
differences
and assess
their impact
Business management
Information systems
Internal controls
Knowledge transfer/sharing
Industry issues
Project management
How can we help?
We can provide assistance by completing the entire implementation plan for you, providing you with the required
support to complete implementation in-house or provide ad-hoc services on request.
Some of the services we offer to assist you in your implementation plan include:
 Completing the impact assessment report to identify the applicable differences between the PBE
Standards and NZ IFRS (or old NZ GAAP), including an initial assessment of their impact.
 Drafting the implementation roadmap based on differences identified.
10
 Preparation of accounting position papers where changes in accounting policies are required or
choices are available.
 Drafting the first annual report prepared in accordance with PBE Tier 1 or Tier 2 financial reporting
requirements.
11
Appendix I
Differences between PBE Standards and NZ IFRS
The following tables set out the significant presentation, recognition, measurement and disclosure differences between PBE Accounting Standards issued by the
XRB for Tier 1 and Tier 2 Public Sector PBEs in May 2013 and NZ IFRS as effective for accounting periods commencing 1 January 2013.
PBE IPSAS
NZ IFRS
Impact
1.1 Presentation of Financial Statements (PBE IPSAS 1)
Name of Income Statement
Statement of Comprehensive Revenue and
Expenses.
Statement of Comprehensive Income
Other general terminology changes throughout the
disclosure requirement.
Changes limited terminology changes; template
annual financial statements will require updating.
Entities will have the ability to use terminology that
meets the financial statement user needs.
Presentation requirements
General terminology changes throughout the
presentation requirements; e.g.:
 Revenue
 Surplus or deficit
 Statement of changes in net assets
General terminology changes throughout the
presentation requirements; e.g.:
 Income
 Profit or Loss
 Statement of changes in equity
Extraordinary items
PBE IPAS 1 does not specifically prohibit the
recognition of items as extraordinary items.
Prohibits the recognition of items as “extraordinary”
We would not expect a change from current
practice, however these is more scope to classify a
movement as extraordinary.
12
PBE IPSAS
NZ IFRS
Impact
Exempt from cash flow statement under
differential reporting.
All reporting entities required to present a cash flow
statement under PBE Framework.
1.2 Cash Flow Statements (PBE IPSAS 2)
Requirement to present Cash Flow Statement
Statement of Cash Flows mandatory for Tier 1 and
Tier 2.
1.3 Accounting for the effects of changes in Foreign Exchange Rates (PBE IPSAS 4)
Accounting for Foreign Operations
Silent on accounting for gains or losses on disposal
of foreign operations.
Explicit guidance provided for accounting for gains
or losses on disposal of foreign operations.
All reporting entities required to present a cash flow
statement under PBE Framework.
1.4 Consolidated and Parent Financial Statements (PBE IPSAS 6)
Accounting for Controlled Entities in Parent Financial Statements
Investments in controlled entities, jointly controlled
entities and associates shall be accounted for:
 at cost; or
 as a financial instrument; or
 using the equity method.
Investments in subsidiaries, joint ventures and
associates shall be accounted for:
 at cost; or
 as a financial instrument.
The PBE standards provide an additional
accounting policy choice to account for investments
on controlled entities, jointly controlled entities and
associates in the separate parent financial
statements.
No change required to current accounting policy.
Accounting for minority interests
IPSAS requires that where losses applicable to a
NZ IFRS requires the applicable portion of total
The value of minority interests shown in
13
PBE IPSAS
NZ IFRS
Impact
minority interest exceed the value of that minority
interest on the consolidated entity’s balance sheet,
the excess is to be allocated against the majority
interest (except where the minority interest has a
binding agreement to make an additional
investment to cover losses.
comprehensive income (including losses) is always
allocated to a minority interest even if it results in
the minority interest having a deficit balance.
consolidated financial statements may differ from
that previously reported under NZ IFRS – we expect
the accounting for minority interests to be rare in the
NFP Sector.
Accounting for changes in ownership interests in a subsidiary without a loss of control
No specific guidance provided.
Changed in ownership interests of a subsidiary
without a loss of control is accounted for as an
equity transaction through the Statement of
Movements in Equity.
We expect NZ IFRS to be used as authoritative
guidance and there expect no change in practice.
NZ IFRS prescribes how to account for the loss of
control of a subsidiary in detail, including
recognising any remaining investment at fair value.
We expect NZ IFRS to be used as authoritative
guidance and there expect no change in practice.
NZ IFRS provides guidance on how a new parent
entity, resulting from a group restructure, will
measure the cost of its investment in the original
parent.
We expect NZ IFRS to be used as authoritative
guidance and there expect no change in practice.
Accounting for loss of control of a subsidiary
Less prescriptive guidance is provided in
comparison to NZ IFRS, IPSAS requires that the
remaining carrying investment at the date that an
entity ceases to a controlled entity shall be
measured at fair value.
Group restructures
No specific guidance provided.
1.5 Investments in Associates (PBE IPSAS 7)
Equity Accounting
14
PBE IPSAS
NZ IFRS
Impact
Equity accounting only required for those associates
in which an entity holds an ownership interest in the
form of a shareholding or other formal equity
structure.
Equity accounting is required for all investments in
associates regardless of the basis of significant
influence.
Minor technical difference.
Some investments in associates may not continue
to be equity accounted under PBE IPSAS; where
there is no formal equity structure (for example
Trusts).
1.6 Revenue from Exchange Transactions (PBE IPSAS 9)
Revenue from exchange transactions versus non-executive transactions
Contains explicit guidance to identify whether
revenue is from exchange or non-exchange
transactions.
NZ IFRS does not distinguish between revenue
from exchange and non-exchange transactions.
In the PBE suite, revenue is now covered by two
separate standards, one for exchange and one for
non-exchange.
Entities will need to identify whether revenue is from
an exchange or non-exchange transaction to ensure
revenue is accounted for in accordance with the
appropriate accounting standard.
Recognition of Sale of Goods Revenue
Sale of goods revenue can only be recognised
when specific conditions are satisfied, including that
the cost incurred in respect of the transaction be
measured reliably.
Further guidance on this requirement is not
specifically provided under PBE IPSAS.
Sale of goods revenue can only be recognised
when specific conditions are satisfied, including that
the cost incurred in respect of the transaction be
measured reliably. NZ IAS 18.19 provides additional
guidance on this requirement:
Revenue and expenses that relate to the same
transaction or other event are recognised
simultaneously; this process is commonly referred
No significant differences in accounting are
expected, the principles of revenue recognition are
consistent.
Where additional guidance is not provided under
PBE Standards, NZ IFRS can be used as
authoritative support
15
PBE IPSAS
NZ IFRS
Impact
to as the matching of revenues and expenses.
Expenses, including warranties and other costs to
be incurred after the shipment of the goods can
normally be measured reliably when the other
conditions for the recognition of revenue have been
satisfied. However, revenue cannot be recognised
when the expenses cannot be measured reliably; in
such circumstances, any consideration already
received for the sale of the goods is recognised as a
liability.
Dividends from Pre-acquisition Profits
Dividends on equity securities carried at cost
received from pre-acquisition profits are not
recognised as revenue but deducted from the cost
of the security.
All dividends on equity securities are recognised as
revenue.
Requires a change in accounting policy from current
practice.
Any impairment of the investment as a result of
dividends from pre-acquisition profits is treated as a
separate transaction
Impact not expected to be wide spread and limited
to equity investments carried at cost.
NZ IFRS includes the following interpretations for
the recognition of revenue in specific transactions:
 NZ SIC 31 – Barter Transactions Involving
Advertising Services
 NZ IFRIC 13 – Customer Loyalty
Programmes
 NZ IFRIC 15 - Agreement for the
Construction of Real Estate
 NZ IFRIC 18 – Transfer of Assets from
Customers
The absence of specific guidance under PBE
IPSAS may result in some entities accounting for
these transactions differently.
Revenue Recognition Interpretations
Not all the interpretations included with NZ IFRS
have been incorporated into the PBE IPSAS
standards.
However, where no guidance is provided under
PBE IPSAS for a specific transaction, an entity
should refer to NZ IFRS as authoritative support.
In addition the principles of revenue recognition are
consistent between the two sets of standards.
16
PBE IPSAS
NZ IFRS
Impact
When it is probable that total contract costs exceed
total contract revenue, the expected losses shall be
recognised as an expense immediately.
Under PBE Standards an expected deficit on a
construction contract should be recognised
immediately unless it was intended that the contract
cost would be fully recovered at the outset.
1.7 Construction Contracts (PBE IPSAS 11)
Total expected costs exceed contract income
An expected deficit on a contract is to be
recognised only when it is intended at inception of
the contract that contracts costs are to be fully
recovered from the parties to the construction
contract.
We would expect this difference will be applicable to
mainly the Public Sector and will have limited
impact (if any) on NFPs.
IPSAS reflects that some public sector entities
might enter into construction contracts for less than
full recovery i.e. government assistance is provided.
In this instance the expected loss is recognised over
the life of the contract.
1.8 Inventories (PBE IPSAS 12)
Non-Exchange Transactions
Where inventories are acquired through a nonexchange transaction, their cost shall be measured
at their fair value as at the date of acquisition.
Where inventories are acquired at no cost, or for
nominal consideration, the cost shall be the current
replacement cost as at the date of acquisition.
The measurement of inventories at fair value at the
date of acquisition is unlikely to be materially
different than current replacement cost.
1.9 Property, Plant and Equipment (PP&E) (PBE IPSAS 17)
17
PBE IPSAS
NZ IFRS
Impact
The PP&E standard specifically includes within its
scope heritage assets.
No specific guidance provided in relation to heritage
assets.
Some assets are described as heritage assets
because of their cultural, environmental, or historical
significance. Examples of heritage assets include
historical buildings and monuments, archaeological
sites, conservation areas and nature reserves, and
works of art.
No specific disclosure requirements in relation to
unrecognised (i.e. off balance sheet) heritage
assets.
PBE’s will be required to assess their current
treatment of heritage assets. The treatment under
NZ IFRS has been varied because the standard has
allowed for different interpretations.
Heritage Assets
PBEs will not be able to de-recognise heritage
assets that were previously recognised on the
balance sheet.
A key characteristic of heritage assets is they are
typically not held (or used) to generate future cash
inflows.
Heritage assets in many cases will not be
recognised on the balance sheet, because they do
not meet the asset recognition criteria - it is not
probable that future economic benefits or service
potential associated with the item will flow to the
entity. In these circumstances, the financial
statements require disclosure of:
 the nature of an unrecognised heritage
assets; and
 where the current information is available
an estimate of the fair value of the heritage
assets (i.e. insurance value).
No RDR exemptions.
18
PBE IPSAS
NZ IFRS
Impact
Allows a choice between a class of asset basis or
an individual asset basis when accounting for
revaluations of PP&E.
Asset revaluations must always be done on a class
of asset basis.
Revaluation of PP&E
Requires accounting for revaluation only on a class
of asset basis.
Fairly consistent with current practice.

Under the class of asset basis, revaluation
increases and decreases, relating to
individual assets within a class of PP&E,
may be offset against each one another.

Under an individual asset basis revaluation
increases and decreases are accounted for
separately for each specific asset within the
asset class and cannot be offset against
revaluations increases or decreases of
other specific asset.
1.10 Related Party Disclosures (PBE IPSAS 20)
Defining Related Parties
Related party means parties are considered to be
related if one party has the ability to:
a. control the other party, or
b. exercise significant influence over the other
party in making financial and operating
decisions, or
c. the related party entity and another entity are
A related party is a person or entity that is related to
the entity that is preparing its financial statements.
a. A person or a close member of that
person’s family is related to a reporting
entity if that person:
i.
has control or joint control over the
reporting entity;
ii.
has significant influence over the
The principles of defining related parties are similar;
however there are subtle differences in the
definitions at a detailed level.
PBE’s will be required to review their policies and
procedures for identifying related parties.
19
PBE IPSAS
subject to common control. Related parties
include:
a. Entities that directly, or indirectly through
one or more intermediaries, control, or are
controlled by, the reporting entity;
b. Associates;
c. Individuals owning, directly or indirectly, an
interest in the reporting entity that gives
them significant influence over the entity,
and close members of the family of any
such individual;
d. Key management personnel, and close
members of the family of key management
personnel; and
e. Entities in which a substantial ownership
interest is held, directly or indirectly, by any
person described in (c) or (d), or over which
such a person is able to exercise significant
influence.
NZ IFRS
Impact
reporting entity; or
is a member of the key
management personnel of the
reporting entity or of a parent of the
reporting entity.
b. An entity is related to a reporting entity if
any of the following conditions applies:
i.
The entity and the reporting entity
are members of the same group.
ii.
One entity is an associate or joint
venture of the other entity (or an
associate or joint venture of a
member of a group of which the
other entity is a member).
iii.
Both entities are joint ventures of
the same third party.
iv.
One entity is a joint venture of a
third entity and the other entity is an
associate of the third entity.
v.
The entity is a post-employment
benefit plan for the benefit of
employees of either the reporting
entity or an entity related to the
reporting entity. If the reporting
entity is itself such a plan, the
sponsoring employers are also
related to the reporting entity.
vi.
The entity is controlled or jointly
controlled by a person identified in
(a).
iii.
20
PBE IPSAS
NZ IFRS
Impact
vii.
A person identified in (a)(i) has
significant influence over the entity
or is a member of the key
management personnel of the entity
(or of a parent of the entity).
Related Party Disclosures
Disclosure of Related Party Transactions
PBE IPSAS only requires related party disclosures
for transactions that have not occurred within a
normal supplier relationship on terms and conditions
no more or less favourable than those which it is
reasonable to expect to have been received if
dealing with an entity on an arm’s length basis.
In general NZ IFRS requires disclosure of all related
party transactions in the year, including the nature
of the transaction, the amount, any outstanding
balances and commitment to related parties.
On adoption of PBE IPSAS the volume of related
party disclosures will likely decrease, as disclosure
is only required for transactions that have not
occurred on a normal arm’s length basis.
No exemption from disclosing transactions with
government related entities, other than above.
There is a partial exemption for transactions with
government-related entities, disclosure is only
required for related party transactions that are
deemed individually significant.
Disclosure of transactions with government related
entities should remain limited where they occur on a
normal arm’s length basis.
Key Management Personnel Remuneration Disclosures
The disclosure required under IPSAS are more
detailed in particular specifying:
a. Disclosure of aggregate remuneration by
major class of key management personnel.
b. Disclosure of the number of individuals
deemed to be key management personnel.
An entity shall disclose key management personnel
compensation in total and for each of the following
categories:
a. short-term employee benefits;
b. post-employment benefits;
c. other long-term benefits;
Significantly more detailed disclosure requirements
will require collation of additional information.
21
PBE IPSAS
c.
Details of loans where the loans are not
widely available to non-key management
personnel or members of the public.
d. Remuneration, other than on normal terms
and conditions, paid to close family
members of key management personnel.
NZ IFRS
Impact
d. termination benefits; and
e. share-based payment.
1.11 Revenue from Non-Exchange Transactions (PBE IPSAS 23)
Non-Exchange Transactions
Non exchange transactions - an entity either
receives value from another entity without directly
giving approximately equal value in exchange, or
gives value to another entity without directly
receiving approximately equal value in exchange.
No equivalent standard.
The PBE Standards puts a stronger onerous on the
reporting entity to identify non-exchange revenue
transactions and measure at fair value.
Transferred Assets
When assets are transferred with conditions
attached, the asset is recognised with a matching
liability. As the conditions are satisfied the liability is
decreased and revenue recognised. The key
feature of a condition is that the asset must be
consumed as specified, or must be returned to the
owner.
In the most part the application of this standard
should result in revenue recognised being
consistent with NZ IFRS.
No equivalent standard, but consistent with the general
principles of NZ IFRS revenue standards.
Compared to existing practice, the standard may
lead to the earlier recognition of some nonexchange revenue.
Further guidance is provided in Appendix III.
The standard assumes no liability exists on nonexchange revenue where revenue is received in
advance of the supply of goods or services, unless
22
PBE IPSAS
NZ IFRS
Impact
an explicit return obligation is specified.
An asset acquired through a non-exchange
transaction shall be measured at its fair value as at
the date of acquisition.
NZ IAS 16 - In respect of public benefit entities,
where an asset is acquired at no cost, or for a
nominal cost, the cost is its fair value as at the date
of acquisition. The fair value of the asset received
must be recognised in the statement of
comprehensive income.
Revenue from Non-Exchange Transactions
Revenue from non-exchange transactions shall be
measured at the amount of the increase in net
assets recognised by the entity.
No equivalent standard, but consistent with the general
principles of NZ IFRS revenue Standards.
Tax Revenues
An entity shall recognise an asset in respect of tax
revenues when the taxable event occurs and the
asset recognition criteria are met.
No equivalent standard, but consistent with the general
principles of NZ IFRS Revenue Standards.
Services In-Kind
An entity may, but is not required to, recognise
services in-kind (i.e. volunteer time) as revenue.
No equivalent standard.
Revenue from Non-Exchange Transactions
Concessionary Loans
Concessionary loans are loans received by an entity
at below market terms. Any difference between the
No equivalent standard, but consistent with the general
principles of NZ IFRS financial instrument standards.
No significant change from current treatment
expected.
23
PBE IPSAS
NZ IFRS
Impact
Entities are required to disclose the amount of
revenue recognised in the year in relation to nonexchange transactions.
No equivalent standard.
Additional note disclosure is required for the amount
of non-exchange revenue recognised in the
reporting period.
Entities are encouraged to disclose the amount of
revenue recognised in the year in relation to
services in kind.
No equivalent standard.
Disclosure is optional; some PBEs will take the
opportunity to report volunteer time, if records are in
place to provide an accurate measurement.
transaction price (loan proceeds) and the fair value
of the loan on initial recognition (based on market
terms) is non-exchange revenue gain.
Disclosures
1.12 Employee Benefits (PBE IPSAS 25)
Post-Employment Benefits Obligations – Selection of Discount Rate
Requires the rate used to discount postemployment obligations to reflect the time value of
money. It states that judgement is required as to
whether the time of value is best approximated by
reference to market yields at the reporting date on
government bonds, high quality corporate bonds or
by another financial instrument.
Requires the rate used to discount postemployment obligations to reflect the time value of
money. The discount rate used is determined by
reference to market yields on high quality bonds,
unless there is a deep market in such bonds, in
which case government bonds shall be used
The principles underlying the selection of the
discount rate are identical, however it is possible
that the rate used under IPSAS could be different,
resulting in employee liability being measured at a
different amount.
The impact is not expected to impact many entities,
as PBEs often determine the discount rate by
reference to market yields on government bonds
and this practice is not expected to change.
24
PBE IPSAS
NZ IFRS
Impact
Includes reference to interpretation standards, NZ
IRIC 14 NZ IAS 19 – The Limit on a Defined Benefit
Assets, Minimum Funding Requirements and their
Interaction.
The absence of specific guidance under PBE
IPSAS may result in some entities accounting for
these transactions differently.
Employee Benefits
Defined Benefit Schemes
Not all the interpretations included with NZ IFRS
have been incorporated into the PBE IPSAS
standards
The interpretation limits the measurement of the
amount of a defined benefit asset to present values
by an entity if there are minimum funding
requirements imposed on the entity.
However, where no guidance is provided under
PBE IPSAS for a specific transaction, an entity
should refer to NZ IFRS as authoritative support.
1.13 Agriculture (PBE IPSAS 27)
Agricultural activity
Defines agricultural activity as the management of
biological transformation and harvest of biological
assets for:
a. sale;
b. distribution at no charge or foe a nominal
charge; or
c. conversion into agricultural produce or into
additional biological assets or for
distribution at no charge or for a nominal
charge.
Defines agricultural activity as the management of
biological transformation and harvest of biological
assets for:
 sale; or
 for conversion into agricultural produce or
into additional biological assets.
The definition of agricultural activity has been
expanded to include assets that are distributed at
no charge or for a nominal charge.
Entities may need to review the treatment of
biological assets distributed for no charge and
assign a fair value to this non-exchange transaction.
25
PBE IPSAS
NZ IFRS
Impact
No specific guidance provided.
Fairly consistent with current practice, if biological
asses are acquired for no considered, the fair value
will need to be estimated and recognised.
Biological assets acquired at no charge
Requires that when an entity acquires biological
assets through non-exchange transactions, the
biological asset is measured at fair value less costs
to sell.
1.14 Financial Instruments (PBE IPSAS 28,29,30)
In summary
Overall the financial instrument standards are consistent between the two frameworks. The IPSAS standards have been based directly on the IFRS standards
with only a few minor amendments to ensure they are applicable to the public sector.
In certain circumstances Financial Guarantee Contracts have different presentation, measurement and disclosure requirements under PBE IPSAS when
compared to NZ IFRS; however in the majority of cases no change is expected.
Entities under the PBE standards effectively have a free choice to apply either PBE IPSAS 28 or PBE IFRS 4 for financial guarantee contracts.
Accounting for Concessionary Loans
PBE IPSAS contains additional application
guidance which clarifies the accounting for
recognition and measurement of concessionary
loans.
NZ IFRS contains limited guidance on initial
recognition of loans that carry no interest and loans
that bear an off-market interest rate.
In the event entities have granted or received
concessionary loans and accounted for them
differently under NZ IFRS, they will be required to
change the treatment of such loans.
Such loans are granted to, or received at, below
market terms and should be distinguished from the
waiver of debt owing to or by an entity.
An entity firstly assesses whether the substance of
26
PBE IPSAS
NZ IFRS
Impact
No equivalent requirement under NZ IFRS.
Additional disclosure required concessionary loans
are held as either assets or liabilities.
Require intangible assets acquired in exchange for
a non-monetary asset to be measured at fair value,
or if the exchange transaction lacks commercial
substance, at the carrying amount of the asset
given up.
Not expected to be applicable to many PBEs,
difference may result in wider scope of intangible
assets being recognised under PBE standards.
the concessionary loan is in fact a loan, a grant, a
contribution from owners or a combination thereof.
If an entity has determined that the transaction, or
part of the transaction, is a loan, it assesses
whether the transaction price represents the fair
value of the loan on initial recognition.
Any difference between the fair value of the loan
and the transaction price (the loan proceeds) is
treated as follows revenue, expenditure or an equity
contribution.
Disclosure of Concessionary Loans
PBE IPSAS requires disclosure of concessionary
loans granted, including reconciliations between
opening and closing carrying amounts, the nominal
value of loans, the purpose and terms of various
types of loans, and the valuation assumptions.
1.15 Intangible Assets (PBE IPSAS 31)
Measurement of Fair Value
Require measurement at fair value if the intangible
asset is acquired in exchange for a non-monetary
asset.
27
PBE IPSAS
NZ IFRS
Impact
Specifically considers the treatment of intangible
heritage assets.
NZ IFRS is silent on accounting for heritage assets.
Any impact on transition will depend on an entity’s
previous accounting policy for recognising intangible
heritage assets.
Examples of intangible heritage assets include
recordings of significant historical events and rights
to use the likeness of a significant public person on,
for example, postage stamps or collectable coins.
Some intangible heritage assets have future
economic benefits or service potential other than
their heritage value, for example, royalties paid to
the entity for use of an historical recording. In these
cases, an intangible heritage asset may be
recognised and measured on the same basis as
other items of cash generating intangible assets.
For other intangible heritage assets, future
economic benefits or service potential is limited to
their heritage characteristics. Consequently the
existence of both future economic benefits and
service potential can affect the choice of
measurement base.
28
Appendix II Differences between PBE Accounting Standards and
old NZ GAAP
Opening remarks
Many PBEs (namely non-large not-for-profits) have continued to prepare financial statements in accordance with accounting standards referred to as “old NZ
GAAP”. The financial statements have been prepared in accordance Financial Reporting Standards (FRSs) and Statements of Standard Accounting Practice
(SSAPs) as issued by the New Zealand Institute of Chartered Accountants, these standards are referred to as “old NZ GAAP” because they are no longer supported
and have not been updated for at least 8 years.
With the release of NZ IFRS in 2007 certain for-profit and not-for-profit entities were provided with a delay in the mandatory adoption of NZ IFRS, and hence have
continued to apply old NZ GAAP. Once the PBE Financial Reporting Framework becomes effective (refer to section 4), old NZ GAAP will no longer exist as a set of
reporting standards with authoritative support. An entity classified as a PBE will need to comply with the PBE Reporting Framework (refer to section 2) if they wish
to assert their annual financial statements are in compliance with generally accepted accounting practice.
Significant differences
The significant differences between the PBE Accounting Standards and old NZ GAAP include all the differences detailed in Appendix I, plus:
PBE IPSAS
Old NZ GAAP
Impact
1. Financial statement disclosures
PBE IPSAS in general will require a significant amount of additional disclosures than that required under
Template annual financial statements will require
29
PBE IPSAS
Old NZ GAAP
old NZ GAAP, even when applying the reduced disclosure regime e.g. mandatory statement of cash flows.
Impact
updating.
2. Financial statement presentations
PBE IPSAS introduces the requirement to present a
Statement of Comprehensive Income.
Does not require classification or disclosure of other
comprehensive income revenue and expenses.
In general PBE IPSAS will not allow movements to
be taken directly to equity, such as revaluation of
investment and land & buildings.
Entities that qualified for differential reporting
concessions could elect to expense all research and
development costs as incurred.
Entities may need to consider recognising intangible
assets that have been previously expensed if they
still have useful life at transition date.
All income, expenditure gains and losses for the
year are required to be reported within one
statement, other than transactions with owners.
3. Intangible assets
When the criteria is achieved to recognition of
internally generated assets (i.e. website), PBE
IPSAS requires the expenditure of research costs
and capitalisation of developments costs.
Entities will also need to develop accounting
policies to determining when development costs
should be capitalised.
4. Investment property
Under PBE IPSAS Investment Property can be
carried at cost or fair value.
If carried at cost, the fair value still requires
disclosure in the notes (RDR exemption)
If the fair value option is adopted, then “Directors
Investment Property required to re-valued each
year, at a fair value determined by a registered
valuer.
Upon first-time adoption PBEs will be required to
make an accounting policy election to measure
investment properties at cost or fair value.
PBEs may be in a position to avoid using a
registered valuer to determine fair value; the small
print requires careful consideration.
30
PBE IPSAS
Old NZ GAAP
Impact
Fair value movements could be recognised in the
reported surplus or deficit or directly in equity
through a revaluation reserve.
For entities that used to recognise fair value
movements in equity, the change will result in more
volatility to the reported surplus or deficit.
Valuations” can be used, if appropriate support is
provided – fair value must be supported by marketbased evidence.
Fair value movements are required to be
recognised in the reported surplus or deficit.
5. Financial instruments: Recognition and Measurement
PBE IPSAS requires that all financial assets and
financial liabilities (including derivatives) are
recognised in the Statement of Financial Position.
No equivalent standards, which has led to
divergence in practice.
The standards provide specific recognition and
measurement criteria depending on the nature and
purpose of holding the financial instrument.
Upon transition an entity will be required to identify
each financial instrument held and compare the
current recognition and measurement accounting
treatment to the required treatment under PBE
IPSAS.
The process will require confirming the nature of the
financial instrument, expected cash flows and the
entity’s intention for holding the instrument.
The classification of financial instruments in
accordance with the standard will determine of
realised and unrealised gains are recognised in:
 the reported surplus or deficit; or
 other comprehensive income.
It expected that differences will have an impact on
the net-asset position of an entity.
No investment fair value gains or losses can be
taken directly to equity reserves.
6. Financial Instruments: Disclosure
PBE IPSAS requires extensive disclosures about
financial risk, risk management, terms & conditions
Limited disclosure requirements in relation to
financial instruments.
Template annual financial statements will require
updating.
31
PBE IPSAS
Old NZ GAAP
and accounting policies in relation to financial
instruments held.
Impact
Internal documentation will also require updating for
policies in relation to financial instrument risk
management and the purpose for holding financial
instruments.
These disclosures are reduced under RDR,
however a significant amount of disclosure
requirements remain under Tier 2.
7. Revenue recognition
PBE IPSAS 9 Revenue from Exchange
Transactions and PBE IPSAS 23 Revenue from
Non-Exchange Transactions provide detailed
guidance on the recognition of revenue and related
disclosures.
No equivalent standard exists, other than the
Statement of Concepts.
Upon adoption of PBE Accounting Standards,
entities will need to assess their current recognition
and measurement accounting policies in relation to
each unique revenue source and compare with the
treatment required under PBE IPSAS.
8. Consolidation and Separate Financial Statements
PBE IPSAS required the consolidation of all entities
controlled by the reporting entity.
Control is defined as “the power to govern the
financial reporting and operating policies of another
entity so as to benefit from its activities”.
In the consolidated financial statements balances of
transactions of transactions between the reporting
entity and the controlled entity must be eliminated.
If the parent prepares separate financial statements
then investments in subsidiaries are measured at
cost.
Upon transition an entity will be required to identify
each financial instrument held and compare the
current recognition and measurement accounting
treatment to the required treatment under PBE
IPSAS.
It is expected that more entities will meet the
definition of “controlled entities” under the new PBE
standard and therefore a greater number of
consolidated financial statements will be required to
be prepared.
The process will require confirming the nature of the
financial instrument, expected cash flows and the
entity’s intention for holding the instrument.
The strict application of PBE IPSAS and associated
guidance material will result in more annual
consolidated financial statements being presented.
It expected that differences will have an impact on
the net-asset position of an entity.
32
PBE IPSAS
Old NZ GAAP
Impact
In general old NZ GAAP encourages the recognition
of impairment losses on assets; however there is no
specific standard to determine how to apply this
principle in practice.
All assets will be assessed for impairment indicators
on annual basis and when the estimated
recoverable amount is less than the carrying
amount and impairment loss recognised.
No equivalent accounting standard.
More onerous accounting measurement and
disclosure requirements are introduced.
9. Impairment
PBE IPSAS 26 Impairment of Cash Generating
Assets and PBE IPSAS 21 Impairment of Non-Cash
Generating Assets provide prescriptive guidance in
relation to assessing all assets for indicators of
impairment on an annual basis and when an
impairment test is required.
If the estimated recoverable amount of an asset is
less than its carrying amount, the carrying amount
of the asset shall be reduced to its recoverable
amount. That reduction is an impairment loss.
10. Employee benefits
All accumulated compensated absences (i.e. sick
leave) are recognised as liabilities.
Long service leave is recognised as a liability over
the entire life of the employment contract as
opposed to when its vests.
Generally the expense was recognised when the
employee benefits were paid.
For employee benefits that accumulate or are
earned over a number of years, complicated
systems are required to calculate the discounted
liability.
Defined benefit pension plan liabilities recognise the
present value of the defined benefit obligation.
33
Commercial in Confidence
Appendix III Application Study – Accounting
for grant income
The new PBE Framework includes two standards dealing with revenue – PBE IPSAS 23 Revenue from
Non-Exchange Transactions, and PBE IPSAS 9 Revenue from Exchange Transactions. As a
consequence, when an entity is determining how to account for an item of revenue, the first step is to
establish whether the revenue arises from an exchange or non-exchange transaction, as this will determine
which standard applies. The two types of revenue are defined as follows:
 Exchange transactions are transactions in which one entity receives assets or services, or has
liabilities extinguished, and directly gives approximately equal value (primarily in the form of cash,
goods, services or use of assets) to another entity in exchange. Examples of exchange
transactions are the purchase or sales of goods or services or the lease of equipment at market
rates.
 Non-exchange transactions arise where an entity receives value from another entity without
giving approximately equal value in exchange.
The determination of whether a transaction is an exchange transaction or a non-exchange transaction will
impact the accounting period in which the revenue is recognised.
The main difference between PBE IPSAS 9 and PBE IPSAS 23 is that:
 PBE IPSAS 9 (exchange) does not require an explicit return obligation to be written into the
contract for a liability to arise where revenue is received in advance of the supply of goods or
services. This is because the contractual basis in an exchange transaction is sufficient to conclude
a liability exists until the supply of goods or services are made.
 PBE IPSAS 23 (non-exchange) takes a different view for the contractual basis of non-exchange
transactions, and assumes no liability exists where revenue is received in advance of the supply of
goods or services, unless an explicit return obligation is specified.
Determining whether a grant is exchange or non-exchange in nature requires judgment about the substance
of the transaction between the grantor and the recipient.
At one end of the spectrum, if the grantor expects nothing in exchange for the grant provided (i.e. a
donation); the recipient’s revenue is clearly from a non-exchange transaction.
At the other end of the spectrum, if the grantor expects to receive specified services or goods in exchange
for the grant, and directly gives approximately equal value in exchange for those services or goods, the
recipient’s revenue would meet the definition of an exchange transaction.
In between the two ends of the spectrum, there may be a variety of arrangements and contracts with
different exchange and non-exchange components.
34
Commercial in Confidence
Deciding whether a grant is exchange or non-exchange is particularly important when the grant is received in
advance of the services or goods being provided, to determine whether a liability should be recognised.
Revenue Received in Advance on an Exchange Transaction
If a grant is classified as an exchange transaction and is received in advance of an entity providing the
related goods or services, deferred revenue is recognised. As goods or services are delivered, the
deferred revenue liability is reduced and revenue equal to that reduction is recognised.
Received in Advance on a Non-Exchange Transaction
When grant revenue is received in advance on a non-exchange contract it is important to determine whether
a return stipulation (i.e. a condition) exists.
If a grant represents a non-exchange transaction and is received in advance of an entity providing the related
goods or services, deferred revenue is only recognised where there is a requirement to return the grant to
the transferor if the grant is not used as stipulated. As the grant is used as stipulated, the deferred revenue
liability is reduced and revenue equal to that reduction is recognised.
If there is no return stipulation attached to the grant, revenue is recognised when the grant is received
(even if there are other stipulations for using the grant).
The most significant impact is likely to be where funds are transferred in advance of the related services in a
non-exchange transaction without a return condition. This may lead to an earlier recognition of revenue,
depending on how such transactions were accounted for under NZ IFRS or old NZ GAAP.
35
Commercial in Confidence
Accounting grants, bequest, donations under PBE IPSAS– decision tree
Is the income transaction
defined as an exchange
transaction?
Income transaction is defined
as a non-exchange
transaction.
No
Yes
Was the income
received with
conditions
attached?
Was the income received
with restrictions
attached?
No
Was the income
received with
restrictions attached?
No
No
Yes
Yes
Income is recognised as
agreed upon goods or
services are delivered.
Was the income
received with
conditions
attached?
Income is recognised
immediately
Income is recognised as
agreed upon goods or
services are delivered.
Yes & No
Yes
Income is recognised
immediately
Income is recognised as
agreed upon goods or
services are delivered.
Condition stipulation – funds received are required to be used for a specific purpose, with a requirement to return unused funds.
Restriction stipulation – funds received are required to be used for a specific purpose, with no requirement to return unused funds.
36
Commercial in Confidence
Contact Us
Crowe Horwath New Zealand Audit Partnership
Member Crowe Horwath International
Audit and Assurance Services
Level 6, Westfield Tower
45 Knights Road
Lower Hutt 5010
P O Box 30568
Lower Hutt 5040
Tel +64 4 569 9069
E: wellington@crowehorwath.co.nz
Level 29, 188 Quay Street
Auckland 1010
PO Box 158
Auckland 1140
New Zealand
Tel +64 9 303 4586
Fax +64 9 309 1198
www.crowehorwath.co.nz
Disclaimer
Crowe Horwath New Zealand Audit Partnership is a member of Crowe Horwath International, a Swiss
verein. Each member of Crowe Horwath is a separate and independent legal entity.