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Model Financial Statements: Tutuki Tertiary Institute

Commentary for 31 December 2018 reporting

The most currently available model financial statements for Tutuki Tertiary Institute are for the year ended 31 December 2016. Other than for the limited number of disclosures noted below, these model financial statements remain relevant for tertiary education institution (TEI) financial statements for the year ended 31 December 2018.

The table below notes the updates to those disclosures in the 2016 model that should be considered by TEIs in preparing their 31 December 2018 financial statements.

2016 model section Discussion
Standards issued and not yet effective (page 17) A number of new standards have been issued since the previous model was published and those standards are not yet effective. TEIs that apply the Tier 1 accounting requirements will need to consider disclosing information about the following standards, if they have not been early adopted, to meet the requirements of PBE IPSAS 3 paragraphs 35 and 36:
  • PBE IFRS 9 Financial Instruments. An illustrative disclosure is provided below:

    PBE IFRS 9 Financial Instruments replaces PBE IPSAS 29 Financial Instruments: Recognition and Measurement and is effective for financial years beginning on or after 1 January 2021, with earlier adoption permitted. The main changes under the standard relevant to the Institute are:
    • New financial asset classification requirements for determining whether an asset is measured at fair value or amortised cost.
    • A new impairment model for financial assets based on expected losses, which might result in the earlier recognition of impairment losses.
    The Financial Statements of the Government will early adopt PBE IFRS 9 for the 30 June 2019 financial year. The Institute intends to early adopt PBE IFRS 9 for the 31 December 2019 financial year to be consistent with the Crown’s accounting policies for financial instruments. The Institute has not yet assessed in detail the impact of the new standard.
  • PBE IPSAS 34 – 38: An illustrative disclosure is provided below:

    PBE IPSAS 34 – 38 replace the existing standards for interests in other entities (PBE IPSAS 6 –  8). The new standards are effective for annual periods beginning on or after 1 January 2019. The Institute will apply these new standards in preparing the 31 December 2019 financial statements. The main change expected from applying these new standards is the group’s 25% interest in the joint venture, the Institute for Advanced ReseachTec, will be equity accounted into the group’s financial statements. This interest is currently proportionally consolidated into the group’s financial statements.
  • PBE FRS 48 Service Performance Reporting. An illustrative disclosure is provided below:

    PBE FRS 48 replaces the service performance reporting requirements of PBE IPSAS 1 and is effective for annual periods beginning on or after 1 January 2021. The Institute is required to prepare its performance information in accordance with generally accepted accounting practice (GAAP) from 31 December 2019 year-ends.  The Institute is considering whether it will early adopt PBE FRS 48 for the 31 December 2019 year end rather than apply the existing performance information requirements of PBE IPSAS 1. The Institute has not yet determined how application of PBE FRS 48 will affect its statement of service performance.
  • Amendments to PBE IPSAS 2 Statement of Cash Flows. An illustrative disclosure is provided below:

    An amendment to PBE IPSAS 2 Statement of Cash Flows requires entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. This amendment is effective for annual periods beginning on or after 1 January 2021, with early application permitted. The Institute does not intend to early adopt the amendment.
Fees-free revenue accounting policy, presentation and disclosure TEIs will need to develop and disclose an appropriate accounting policy for revenue from fees-free education payments. We would also expect that fees-free revenue to be separately disclosed either in the face of statement of comprehensive revenue and expense or in the notes to the financial statements. An illustrative accounting policy is provided below:

Fees-free
The Institute considers fees-free revenue is non-exchange revenue and recognises revenue when the course withdrawal date for an eligible student has passed. The Institute has presented funding received for fees-free as part of student fees. This is on the basis that receipts from TEC are for payment on behalf of the student as specified in the relevant funding mechanism..

You are welcome to download a copy of the model financial statements.

We welcome any feedback on the application of this model to TEIs, or any other comments, that may help with future updates of the model financial statements.

Page last updated: 28 February 2019