The finalised requirements are largely consistent with proposals released in November 2013, and the modifications made to the existing PBE standards are designed to make these standards fully applicable and understandable in the context of not-for-profit financial reporting. However, the amendments requirements are not expected to impact public sector entities who also apply this suite of standards.

The not-for-profit amendments made include extensions to existing language to include not-for-profit concepts, adding example illustrative financial statements for not-for-profit entities, additional guidance on concepts such as control and non-exchange transactions, and additional concessions to reduce the costs of transition to revised standards.

Under the New Zealand Accounting Standards Framework, the applicability of accounting standards is determined both by the type of the entity (for-profit, not-for-profit, public sector) and a 'tiered' structure that reflects the nature of the entity, which in the case of not-for-profit entities relies on whether the entity is 'publicly accountable' and/or 'large' (by reference to its level of expenses).

In summary terms, the tiers of reporting entities for not-for-profit entities are determined as follows:

• Tier 1. Not-for-profit entities having 'public accountability' (based on the IASB's definition, but with supplementary information and deeming of particular entities), or having total expenses of more than NZ$30 million
• Tier 2. Not-for-profit entities not having 'public accountability' or total expenses of more than NZ$30 million, which are not eligible, or do not elect, to report using Tier 3 or Tier 4 reporting requirements. Entities eligible to apply Tier 2 reporting requirements can also elect to apply Tier 1 reporting requirements
• Tier 3. Not-for-profit entities without 'public accountability' and having total expenses not exceeding NZ$2 million, which elect to report under Tier 3 requirements
• Tier 4. Not-for-profit entities permitted by an Act to report in accordance with non-GAAP standards (e.g. cash basis of accounting), because they do not have public accountability (as defined) and do not meet the size threshold to be a 'specified not-for-profit entity' (as defined), which elect to report under Tier 4 requirements.

The revised PBE standards apply to 'Tier 1' and 'Tier 2' not-for-profit entities, with 'Tier 2' entities having disclosure concessions but otherwise applying all the recognition and measurement requirements of the standards.

The new standards and framework are applicable for periods beginning on or after 1 April 2015. Click for press release (link to New Zealand External Reporting Board website).