Dated at Wellington this 10th day of August 2004.
The Common Seal of the Securities Commission was affixed in the presence of:
Statement of reasons
This notice comes into force on the day after the date of its notification in the Gazette and expires on the close of 31 December 2008. It exempts issuers and persons acting on their behalf from the obligation to include a statement in the auditor's report, to the extent that the statement relates to accounting policies that are normally adopted by or in respect of the company, group, entity, unit trust, or scheme.
The exemptions allow the use of accounting policies that are consistent with accounting policies that are reasonably expected to be used in the future, once New Zealand equivalents to International Financial Reporting Standards (NZ IFRSs) are adopted (whether because these have been approved as financial reporting standards, or because these have been published as pending standards by the Accounting Standards Review Board).
The exemptions are subject to the conditions that—
•a statement is included in the auditor's report in a form that indicates the accounting policies are consistent with those that are reasonably expected to be used in the future, once NZ IFRSs are adopted; and
•if the registered prospectus contains other prospective financial information, the usual statement referring to accounting policies that are normally adopted by or in respect of the company, group, entity, unit trust, or scheme is included in the registered prospectus, and that the prospective financial information to which it relates is clearly identified.
The Securities Commission considers the exemptions contained in this notice are appropriate because—
•the Accounting Standards Review Board (the Board), which is responsible for the approval of financial reporting standards in New Zealand, has announced its decision to adopt International Financial Reporting Standards issued by the International Accounting Standards Board; and
•although the effect of that decision will not be clear until it results in approved financial reporting standards under the Financial Reporting Act 1993, if the decision of the Board is implemented, these standards will apply to reporting periods beginning on or after 1 January 2007 and, in addition, entities will be able to elect to adopt New Zealand equivalents of those standards for reporting periods beginning on or after 1 January 2005; and
•during the period leading up to the adoption of NZ IFRSs by or in respect of an entity, group, or scheme, an issuer who presents prospective financial information should do so in accordance with the accounting policies reasonably expected to be used in the future for reporting historically oriented general purpose financial statements; and
•the relevant provisions of the Securities Regulations 1983 do not contemplate the situation in which the accounting policies that are expected to be applied to report historically oriented general purpose financial information in the future are different from the accounting policies that are normally adopted by or in respect of a company, group, entity, unit trust, or scheme.