Annual Report 2010 - Christchurch City Council

Statement of
accounting policies
(continued)
Financial statements
Annual Report
Christchurch Otautahi
2010
p155.
Notes to financial statements
1. Statement of accounting policies (continued)
New standards and interpretations issued and not
yet adopted
The following new standards, interpretations and amendments are
not yet effective for the year ended 30 June 2010, and have not been
applied in preparing these consolidated financial statements:
Standards, amendments and interpretations issued but not yet
effective that have not been early adopted, and which are relevant
to the Council include:
• Amendments to NZ IFRS arising from the Annual Improvements
Project which is effective for reporting periods beginning
on or after 1 January 2010 except for the amendments to NZ
IFRS 3, NZ IFRIC 9, NZ IFRIC 16 and NZ IAS 38 which are
effective from 1 July 2009. The amendments to some Standards
result in accounting changes for presentation, recognition or
measurement purposes, while some amendments that relate
to terminology and editorial changes are expected to have
no or minimal effect on accounting. The main amendment of
relevance to New Zealand entities is that made to NZ IAS 17 by
removing the specific guidance on classifying land as a lease
so that only the general guidance remains. Assessing land
leases based on the general criteria may result in more land
leases being classified as finance leases and if so, the type of
asset which is to be recorded (intangible v property, plant and
equipment) needs to be determined.
• NZ IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments effective from 1 July 2010 - This Interpretation
addresses the accounting by an entity when the terms of a
financial liability are renegotiated and result in the entity issuing
equity instruments to a creditor of the entity to extinguish all or
part of the financial liability. It does not address the accounting
by the creditor.
• Amendments to NZ IFRIC 14 Prepayments of a Minimum
Funding Requirement effective 1 January 2011 - This amendment
provides entities with the ability to recognise an asset for
prepayments of minimum funding requirement contributions.
• Amendments to NZ IFRS 2 – Share-based Payment Transactions
effective 1 January 2010 - This Standard makes amendments
to NZ IFRS 2 Share-based Payment and supersedes NZ IFRIC
8 Scope of NZ IFRS 2 and NZ IFRIC 11. NZ IFRS 2 — Group
and Treasury Share Transactions. The amendments clarify
the accounting for group cash- settled share-based payment
transactions in the separate or individual financial statements
of the entity receiving the goods or services when the entity has
no obligation to settle the share-based payment transaction.
The amendments clarify the scope of NZ IFRS 2 by requiring an
entity that receives goods or services in a share-based payment
arrangement to account for those goods or services irrespective
of which entity in the group settles the transaction, and
regardless of whether the transaction is settled in shares or cash.
• NZ IAS 24 Related Party Disclosures (Revised 2009) effective 1
January 2011 - This Standard makes amendments to New Zealand
Accounting Standard NZ IAS 24 Related Party Disclosures.
The amendments simplify the definition of a related party and
provide a partial exemption from the disclosure requirements for
government-related entities.
• NZ IFRS 9 Financial Instruments effective 1 January 2013 - This
standard is part of the IASB’s project to replace IAS 39 Financial
Instruments: Recognition and Measurement. The standard
applies to financial assets, their classification and measurement.
All financial assets are required to be classified on the basis of
the entity’s business model for managing the financial assets
and the contractual cash flow characteristics of the financial
asset. Financial assets are initially measured at fair value plus,
in the case of a financial asset not at fair value through profit or
loss, particular transaction costs and subsequently measured at
amortised cost or fair value.
The Council intends to adopt these standards and amendments for
the year ending 30 June 2011, an initial assessment indicates that
the impact is not significant and the changes will mainly impact on
the presentation of the accounts.