NEW ZEALAND GAZETTE, No. 20 — 5 MARCH 2015

Framework for Differential Reporting

Differential reporting concessions for entities electing to apply Old GAAP with differential reporting

Financial Reporting Standards

Full Exemption
Any qualifying entity is granted full exemption from:

FRS-10 Statement of Cash Flows

FRS-31 Disclosure of Information About Financial Instruments

Partial Exemption
Qualifying entities are given partial exemption from the following standards.

FRS-3: Accounting for Property, Plant and Equipment: Qualifying entities may choose to adopt any of the following exemptions from the requirements of FRS-3:

1. In respect of those items of property, plant and equipment accounted for under the historical cost system of accounting, the entity may adopt the rates of depreciation applicable for income tax purposes. If this exemption is taken, the entity is not required to comply with the requirements of paragraphs 8.16 and 8.19 of FRS-3.

2. The entity is not required to comply with paragraph 5.24 of FRS-3. If this exemption is taken, the entity shall expense all borrowing costs as incurred.

3. The entity is not required to disclose the information denoted with an asterisk in FRS-3.

FRS-4: Accounting for Inventories: Qualifying entities are not required to sub-classify inventory (into categories such as raw materials, work in progress and finished goods) as required by paragraph 5.29(b)(ii) of FRS-4.

FRS-9: Information to be Disclosed in Financial Statements: FRS-9 identifies the specific components that shall be disclosed separately. Qualifying entities are given several concessions. Each disclosure concession is identified by an asterisk in the standard.

FRS-13: Accounting for Research and Development Activities: Qualifying entities are required to comply with FRS-13 with the exception of section 5. Where this exemption is applied, all research and development costs shall be recognised as an expense in the period they are incurred.

FRS-14: Accounting for Construction Contracts: Qualifying entities may recognise profit on all construction contracts on a completed method as described in paragraph 4.1 of FRS-14 and need not comply with any other paragraphs of FRS-14.

FRS-15: Provisions, Contingent Liabilities and Contingent Assets: Qualifying entities are not required to make disclosures in their financial statements of the requirements in FRS-15 denoted with an asterisk.

FRS-19: Accounting for Goods and Services Tax: Qualifying entities may recognise revenue and expense items either with Goods and Services Tax (GST) included (gross) or with GST excluded (net), provided that:

1. the method adopted by the reporting entity shall be:
   1. applied consistently to all revenue and expense items; and
   2. disclosed in the statement of accounting policies in terms of 5.8 of FRS-19; and
2. where GST input tax is irrecoverable, paragraph 5.6 of FRS-19 shall apply.

FRS-21: Accounting for the Effects of Changes in Foreign Currency Exchange Rates: Qualifying entities are not required to:

1. translate transactions measured in a foreign currency using the exchange rate in effect at the transaction date, or at a rate approximating this rate, as required by paragraph 5.1 of FRS-21. If transactions are not translated at the rate in effect at the transaction date, or a rate approximating this rate, then transactions settled in the accounting period shall be translated at the settlement rate, and transactions unsettled at the balance date shall be translated at the closing rate in accordance with paragraph 5.3 of FRS-21; or

2. separately disclose the net exchange difference included in the statement of financial performance for the period as required by paragraph 7.1(b) of FRS-21.

FRS-24: Interim Financial Statements: All entities that prepare general purpose interim financial statements shall comply with FRS-24 except that qualifying entities may apply differential reporting exemptions available under other specific accounting standards in addition to the specific disclosure exemptions identified in the standard.

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