Objective

The main objective of this model is to guide CCOs in preparing financial statements that comply with NZ IFRS.

The model financial statements have been prepared using a fictitious non-company entity, Te Motu Regional Economic Development Trust (the Trust).

Although this model is based on a CCO that is a trust, most of the model would apply equally to CCOs that are of a different legal nature (for example, incorporated societies or companies).

The model is prepared on the basis that the Trust is a public benefit entity for the purposes of NZ IFRS.

Main updates to the model

The table below explains the main updates to the model since it was previously published in 2009. Due to the time that has elapsed since the model was last updated, we have indicated the main changes to the model that are relevant for the first time for the 30 June 2011 financial statements and those that were first relevant to prior year financial statements.

Changes to the model financial statements that are relevant for the first time for the 30 June 2011 financial statements

Changes to the model financial statements that were first relevant to prior year financial statements

Content

Included in the model are:

• a statement of comprehensive income;
• a statement of financial position;
• a statement of changes in equity;
• a statement of cash flows;
• a statement of accounting policies; and
• notes to the financial statements.

The model has not applied the differential reporting exemptions that may be available to qualifying entities under the differential reporting framework. Appendix A of the Framework for Differential Reporting for Entities Applying the New Zealand Equivalents to International Financial Reporting Standards Reporting Regime details the full and partial exemptions available to qualifying entities.

The model does not include all the information that is required to be disclosed by sections 67 to 69 of the Local Government Act 2002 (the LGA) in a CCO’s annual report. In particular, the model does not include the non-financial performance information required under section 68 of the LGA.

Not all of the accounting policies and notes will be applicable to each CCO. The model is not intended to cover all of the possible financial reporting issues that could arise in the sector.  CCOs that need to report on other matters not covered by this model may want to refer to the Local Government model financial statements available on the Audit New Zealand website, which provide a wider range of disclosures.

The model illustrates a possible financial statement format for a CCO. For example, the statement of comprehensive income has been prepared by classifying expenses based on the nature of the expenditure. Alternatively, expenses could be classified based on their function. This is just one example where there may be more than one way of disclosing the information required under NZ IFRS.

While the model provides guidance on disclosure matters, it does not deal with the underlying accounting treatment.

CCOs will need to make choices about the accounting policies and presentation options appropriate for their circumstances.

The model does not address all the possible recognition, measurement, presentation, and disclosure requirements of NZ IFRS. CCOs should not use the model as a substitute for referring to individual NZ IFRS standards and interpretations applicable to their specific circumstances.

References to specific standards are provided in the left margin of the model and a subject index on page 29 for easy searching. References to NZ IFRS are sourced from the January 2011 NZ IFRS volumes.

Standards not covered by the model

The model does not include the recognition, measurement, presentation or disclosure requirements of the following standards:

• NZ IFRS 1 First-time Adoption of New Zealand Equivalents to International Financial Reporting Standards;
• NZ IFRS 2 Shared-based Payment;
• NZ IFRS 3 Business Combinations;
• NZ IFRS 4 Insurance Contracts;
• NZ IFRS 6 Exploration for and Evaluation of Mineral Resources;
• NZ IFRS 8 Operating Segments;
• NZ IAS 11 Construction Contracts;
• NZ IAS 21 The Effects of Changes in Foreign Exchange Rates;
• NZ IAS 26 Accounting and Reporting by Retirement Benefit Plans;
• NZ IAS 27 Consolidated and Separate Financial Statements;
• NZ IAS 28 Investments in Associates;
• NZ IAS 29 Financial Reporting in Hyperinflationary Economies;
• NZ IAS 31 Interests in Joint Ventures;
• NZ IAS 33 Earnings per Share;
• NZ IAS 34 Interim Financial Reporting;
• NZ IAS 40 Investment Property; and
• NZ IAS 41 Agriculture.

In addition, any standards, interpretations, and amendments issued after 30 April 2011 are not included in the model financial statements.