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WELLINGTON OFFICE Level 7, 50 Manners St, Wellington • AUCKLAND OFFICE Level 12, 55 Shortland St, Auckland
POSTAL PO Box 11250, Manners St Central Wellington 6142, New Zealand • PH +64 4 550 2030 • FAX +64 4 385 3256
W W W .X R B. G OV T .N Z
25 October 2013
Mr Hans Hoogervorst Chairman The International Accounting Standards Board 30 Cannon Street London EC4M 6XH United Kingdom
Dear Hans
IASB Exposure Draft ED/2013/7 Insurance Contracts
The New Zealand Accounting Standards Board (NZASB) is pleased to submit its comments
regarding the International Accounting Standards Board's (IASB) Exposure Draft ED/2013/7
Insurance Contracts.
The NZASB generally supports the proposals and encourages the IASB to finalise a Standard on
insurance. The NZASB supports a number of improvements in ED 2013/7 compared to ED
2010/8, including:
the proposal to measure insurance contract liabilities using a current value approach;
the principle that there is one measurement model for insurance contract liabilities and that the simplified approach for measuring insurance contract liabilities (i.e. the premium allocation approach or PAA) is a reasonable approximation of the ‘full’ approach for measuring insurance contract liabilities (i.e. the building block approach or BBA) and alignment of the related disclosures;
‘unlocking’ the contractual service margin (CSM) by remeasuring fulfilment cash flows using current information;
the way in which the boundary of an insurance contract is determined; and
the transition requirements.
However, the NZASB has significant concerns about some of the specific proposals; in particular
the following:
(a) Proposals to use historical discount rates to segregate the result between profit or loss
and other comprehensive income (OCI).
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(b) Proposal to mandate 'mirroring'.
(c) Proposed disclosure requirements.
New Zealand and Australia have existing requirements for insurance contracts, which form part
of the New Zealand and Australian equivalents to International Financial Reporting Standards
(IFRS). Hence, in considering whether the proposals represent an improvement in financial
reporting, we have considered the proposed requirements against our existing requirements. In
this context, the NZASB is concerned that some aspects of these proposals could result in the
cost of implementing any final Standard outweighing the potential benefits for New Zealand
constituents.
Proposals in relation to OCI
The NZASB has significant concerns about the proposals to use historical discount rates to
segregate the result between profit or loss and OCI including:
(a) the requirement to present in OCI changes in estimates in the present value of
insurance contract cash flows due to changes in discount rates compared with the rate
that applied when the contract was initially recognised;
(b) the requirement to track changes in discount rates of contracts from historical rates (in
order to achieve the above); and
(c) the requirement for accretion of interest in profit or loss based on historical discount
rates.
Instead, the NZASB recommends that the current-measurement basis be the primary basis, as
this approach is preferable conceptually and practically, as explained further in our response to
Question 4. It also reflects the approach used in practice in New Zealand and Australia.
Experience over about 15 years has shown this approach to be both practical to implement and
understandable to users. If the IASB believed it is necessary to retain the proposals in some
form, the recognition in OCI of amounts arising from changes in discount rates (and recognition
in profit or loss of interest at historical rates) could be permitted as an alternative accounting
policy. An entity could be permitted to elect to apply this alternative policy to its insurance
contracts using the criteria in IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors for adoption of accounting policies.
Proposal to mandate 'mirroring'
The NZASB can understand a desire for ‘mirroring’ because ‘mirroring’ can, in some situations,
eliminate accounting mismatches. However, the NZASB is concerned that mandatory ‘mirroring’
could result in inconsistent measurement of similar insurance liabilities.
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In addition, the NZASB expects that ‘mirroring’ could be overly complex to apply and overly
complex for users to understand. This complexity has the potential to reduce transparency in
financial reporting and to increase the cost burden on users and preparers of financial
information.
The NZASB recommends that the IASB considers permitting ‘mirroring’ as a non-mandatory
accounting treatment. That way, ‘mirroring’ could be applied to relatively simple investment-
linked insurance contracts or the components of contracts that are clearly investment-linked,
but the other proposed measurement requirements could be applied to more complex contracts
or the more complex components of contracts.
Currently there are no equivalent ‘mirroring’ provisions in New Zealand insurance accounting
standards. To the extent that life insurance contract liabilities are contractually linked to the
performance of assets, the discount rates are based on market returns on assets backing the life
insurance liabilities. The NZASB is not aware of any general insurance contracts accounted in
accordance with New Zealand accounting standards on general insurance that would be
affected by the proposals.
Proposed disclosure requirements
The NZASB considers that the disclosures proposed are too detailed and too onerous. There
appears to be increasing tendency towards requiring disclosure of reconciliations without any
underlying basis for this.
Disclosure of reconciliations might help some users to 're-work' the information to apply their
own insurance accounting model. However, financial statements are prepared for the purposes
of meeting the common information needs of a wide range of users; not the information needs
of individual users. The NZASB therefore encourages the IASB to reconsider the volume of
disclosures proposed in light of our comments and to respond positively to stakeholders’ calls to
reduce disclosure overload.
Responses to questions for respondents
Our responses to the specific questions for respondents are set out in the Appendix to this
letter.
If you have any queries or require clarification of any matters in this submission, please contact
Clive Brodie ([email protected]) or me.
Yours sincerely
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Appendix
Adjusting the contractual service margin
Question 1
Do you agree that financial statements would provide relevant information that faithfully
represents the entity’s financial position and performance if:
(a) differences between the current and previous estimates of the present value of future cash
flows related to future coverage and other future services are added to, or deducted from,
the contractual service margin, subject to the condition that the contractual service margin
should not be negative; and
(b) differences between the current and previous estimates of the present value of future cash
flows that do not relate to future coverage and other future services are recognised
immediately in profit or loss?
Why or why not? If not, what would you recommend and why?
We agree with the proposal to remeasure the contractual service margin (CSM), including
adjusting the margin for the impact of changes in assumptions relating to future services and
coverage. However, the NZASB considers that a major source of insurers’ future profits relates
to bearing risk in future periods. Accordingly, the NZASB recommends that the change in the
risk margin that relates to future coverage be recognised through adjustment of the CSM and
only the change in the risk margin that relates to past coverage be recognised in profit or loss
immediately.
We note that a reason for the IASB not proposing such adjustments is that some insurers have
indicated that it would be impracticable to distinguish between the changes in risk relating to
past and future coverage. However, Australian and New Zealand constituents have indicated
that such a distinction can, and is currently determined reliably; and this has been determined
for about 15 years.
We agree that the CSM should not be negative and any further projected deterioration should
be recognised immediately in profit or loss. However, we recommend that the IASB provide
guidance on accounting for the reversal of circumstances that gave rise to losses.
6
Contracts that require the entity to hold underlying items and specify a link to returns on those
underlying items
Question 2
If a contract requires an entity to hold underlying items and specifies a link between the
payments to the policyholder and the returns on those underlying items, do you agree that
financial statements would provide relevant information that faithfully represents the entity’s
financial position and performance if the entity:
(a) measures the fulfilment cash flows that are expected to vary directly with returns on
underlying items by reference to the carrying amount of the underlying items?
(b) measures the fulfilment cash flows that are not expected to vary directly with returns on
underlying items, for example, fixed payments specified by the contract, options embedded
in the insurance contract that are not separated and guarantees of minimum payments that
are embedded in the contract and that are not separated, in accordance with the other
requirements of the [draft] Standard (ie using the expected value of the full range of possible
outcomes to measure insurance contracts and taking into account risk and the time value of
money)?
(c) recognises changes in the fulfilment cash flows as follows:
(i) changes in the fulfilment cash flows that are expected to vary directly with returns on the
underlying items would be recognised in profit or loss or other comprehensive income on
the same basis as the recognition of changes in the value of those underlying items;
(ii) changes in the fulfilment cash flows that are expected to vary indirectly with the returns on
the underlying items would be recognised in profit or loss; and
(iii) changes in the fulfilment cash flows that are not expected to vary with the returns on the
underlying items, including those that are expected to vary with other factors (for example,
with mortality rates) and those that are fixed (for example, fixed death benefits), would be
recognised in profit or loss and in other comprehensive income in accordance with the
general requirements of the [draft] Standard?
Why or why not? If not, what would you recommend and why?
The NZASB can understand a desire for ‘mirroring’ because ‘mirroring’ can, in some situations,
eliminate accounting mismatches. However, the NZASB is concerned that mandatory ‘mirroring’
could result in inconsistent measurement of similar insurance liabilities.
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Currently there are no equivalent ‘mirroring’ provisions in New Zealand insurance accounting
standards. To the extent that life insurance contract liabilities are contractually linked to the
performance of assets, the discount rates are based on market returns on assets backing the life
insurance liabilities. The NZASB is not aware of any general insurance contracts accounted in
accordance with New Zealand accounting standards that would be affected by the proposals.
In addition, the NZASB expects that ‘mirroring’ could be overly complex to apply and overly
complex for users to understand. This complexity has the potential to reduce transparency in
financial reporting and to increase the cost burden on users and preparers of financial
information. We expect that significant operational complexities will arise:
(a) for contracts where some cash flows vary directly with the underlying assets and some
cash flows do not;
(b) when contracts include surrender options available to policyholders;
(c) when contracts have profit participation features and policyholders receive their share
of profits on a delayed basis;
(d) for contracts that provide options for policyholders to receive benefits in a variety of
forms, including an increased amount of cover, a longer period of cover and larger
surrender values;
(e) with the interaction of ‘mirroring’ and the presentation of amounts in OCI;
(f) on transition; and
(g) on consolidation where mirroring required in an individual insurer’s financial statements
would have to be reversed on consolidation.
We recommend that the IASB consider giving entities the option of mirroring if entities consider
it relevant to their particular circumstances (much like the proposals in the 2010 exposure
draft). That way, ‘mirroring’ could be applied to relatively simple investment-linked insurance
contracts or the components of contracts that are clearly investment-linked, but the other
proposed measurement requirements could be applied to more complex contracts or the more
complex components of contracts.
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Presentation of insurance contract revenue and expenses and interest expense in profit or loss
Question 3
Do you agree that financial statements would provide relevant information that faithfully
represents the entity’s financial performance if, for all insurance contracts, an entity presents, in
profit or loss, insurance contract revenue and expenses, rather than information about the
changes in the components of the insurance contracts?
Why or why not? If not, what would you recommend and why?
The NZASB agrees with the proposals regarding the presentation of insurance contract revenue
and expenses. The proposals will appropriately result in reporting of insurance revenue in a
manner that is more consistent with reporting of revenue by non-insurers. As noted in
paragraph BC76 of the Exposure Draft, the proposals should be broadly consistent with the
general principles in the IASB’s 2011 exposure draft, Revenue from Contracts with Customers,
such that an entity would depict the transfer of proposed coverage and other services in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for
the coverage and other services, as it satisfies its performance obligations. Accordingly, an
insurer would not include investment components in revenue.
In addition, aligning presentation with non-insurers allows diversified financial institutions to
present information about their insurance and non-insurance business on a similar basis (rather
than presenting insurance related items in a different manner).
Question 4
Do you agree that financial statements would provide relevant information that faithfully
represents the entity’s financial performance if an entity is required to segregate the effects of
the underwriting performance from the effects of the changes in the discount rates by:
(a) recognising, in profit or loss, the interest expense determined using the discount rates that
applied at the date that the contract was initially recognised. For cash flows that are
expected to vary directly with returns on underlying items, the entity shall update those
discount rates when the entity expects any changes in those returns to affect the amount of
those cash flows; and
(b) recognising, in other comprehensive income, the difference between:
(i) the carrying amount of the insurance contract measured using the discount rates that
applied at the reporting date; and
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(ii) the carrying amount of the insurance contract measured using the discount rates that
applied at the date that the contract was initially recognised. For cash flows that are
expected to vary directly with returns on underlying items, the entity shall update those
discount rates when the entity expects any changes in those returns to affect the amount
of those cash flows?
Why or why not? If not, what would you recommend and why?
The NZASB has significant concerns with the proposals to use historical discount rates to
segregate the result between profit or loss and OCI. We are concerned that this approach:
(a) introduces yet another complex, hybrid measurement model which lacks a conceptual
rationale, is complex to apply and extends the use of OCI ahead of any agreement on a
basis for OCI;
(b) implies a link with asset measurement where a link is not justified;
(c) does not provide users with useful information;
(d) is not consistent with the way in which entities manage their business; and
(e) will not be practical to implement because of difficulties and significant costs associated
with tracking discount rates that applied from inception an insurance contract.
In this regard, we support the alternative view of Mr Stephen Cooper.
If the IASB felt it necessary to retain the proposals, the NZASB could support an accounting
policy option to present changes in discount rate in OCI. An entity could be permitted to elect
to apply this alternative policy to its insurance contracts, using the criteria in IAS 8 for adoption
of accounting policies.
Introduction of another measurement model and extension of the use of OCI
The proposals further complicate financial statements by introducing another measurement
model, being a hybrid of current value and amortised cost (paragraph BC119 of the Exposure
Draft notes the proposed presentation approximates: “an amortised cost view of the time value
of money to be recognised in profit or loss”). This is inconsistent with the objective of
simplifying classification and measurement requirements.
The proposals would take one element of price change to OCI and leave all other elements of
price change in profit or loss. Those other elements include the impact of changes in inflation
10
assumptions, which are generally regarded as providing a ‘natural hedge’ of discount rate
changes on claims liabilities. This could result in artificial volatility in profit or loss.
A ‘pure’ presentation of historical cost in profit or loss would involve applying the PAA in the
profit or loss and recognising any other revenues and expenses in OCI. However, such an
approach would not provide useful information about the current measure of insurance
contract liabilities in profit or loss. Therefore, the NZASB does not support such an approach.
In addition, IASB DP/2013/1 A Review of the IASB’s Conceptual Framework for Financial
Reporting is open for comment until 14 January 2014. This DP discusses the use of OCI. The
NZASB is concerned that the proposal to recognise amounts in OCI further extends the use of
OCI before a conceptual basis for OCI has been discussed and agreed.
The NZASB considers that issues of volatility in profit or loss would be best dealt with through a
comprehensive project on performance reporting rather than on a piecemeal basis when setting
or updating individual standards. Reporting in OCI movements resulting from changes in the
discount rate from inception of an insurance contract do not fully address the issue, would be
prohibitively expensive to implement and would not reflect the way in which insurance
contracts are assessed and managed.
Implied link with asset measurement
Paragraph BC119 of the Exposure Draft also argues that the proposal would give a clearer
presentation of “underwriting performance and investment performance”, implying a link with
the proposed accounting for some assets at fair value through OCI(FVOCI).
Paragraph IN1(b) of ED/2012/4 Classification and Measurement: Limited Amendments to IFRS 9
explains that the proposed amendments “take into account the interaction of the classification
and measurement model for financial assets with the IASB’s Insurance Contracts project”.
However, the connection between the two proposals has yet to be clearly articulated.
A logical extension of the IASB’s justification in paragraph BC119 would be to require all assets
backing insurance liabilities to be mandatorily accounted for at FVOCI and all movements in
insurance liabilities presented in OCI to achieve an amortised cost profit or loss measure. A
consistent approach to recycling (all or none) would also be needed; however, the current FVOCI
debt instrument proposal involves recycling and the IFRS 9 Financial Instruments FVOCI equity
requirement involves no recycling.
Information value for users
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The value to users of trying to present an amortised cost profit or loss (by excluding one
component of the current value in OCI) in what is otherwise a current value measurement
model is not clear and, so, is likely to cause confusion.
Some New Zealand insurers already disclose the impact of discount rate movements based on
the current value measurements at the beginning and end of each reporting period, either
outside their IFRS financial statements (in analyst briefing materials) or by having profit
subtotals before and after the impact of discount rates. Some users find that disaggregation of
‘current’ information useful.
In addition, the proposals extend the use of OCI ahead of the IASB reaching a conclusion on
what it is that profit and loss information is trying to convey to users of financial statements and
what the purpose of OCI is. At present there is a mix of items in profit and loss and in OCI and
the proposals add to this mix.
Inconsistency with the way insurance business is managed
We are not aware of any insurers with any lines of business that they manage using historical
information.
The liquidity and solvency of insurers, as monitored by insurers themselves and by prudential
regulators is not in any way judged by reference to discount rates at contract inception. Rather,
this monitoring is done by comparing current values for assets and liabilities. Mismatch risk is
monitored by comparing current values for assets and liabilities within various maturity
categories.
Accordingly, the information reported to regulators and included in segment reports required by
IFRS 8 Operating Segments, would not be the same information, or be extracted from the same
systems, required to apply the proposals in the Exposure Draft.
Practical difficulty and cost of implementing the proposals
The proposals would require entities to identify and track discount rates from contract inception
for the life of a policy or claims liability, which could be up to 60 years.
The appropriate unit of account for tracking movements in the discount rates is likely to be
either individual contracts or a portfolio of similar contracts. Insurance contracts are normally
managed on a portfolio basis. If the proposed requirement were to have any meaning, in
theory, a separate cohort of contracts would need to be identified and tracked each time
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discount rates change in a way that would have a material impact. Such changes could occur
many times within a single reporting period.
Developing and maintaining systems to appropriately track movements in discount rates at a
detailed level, and for long periods of time, would be costly.
To mitigate this cost, it is likely that entities would need to take a pragmatic view of the unit of
account used. Different entities are likely to come to different pragmatic solutions potentially
undermining comparability.
In addition, the Exposure Draft does not explain whether the ‘inception discount rate’ is based
on the date of the contract to which the claim relates, or when an insurer becomes aware of a
claim or an occurrence of an event that is expected to give rise to a claim. Nor does it explain
how to deal with any discount rate changes during claims development.
Effective date and transition
Question 5
Do you agree that the proposed approach to transition appropriately balances comparability
with verifiability?
Why or why not? If not, what do you suggest and why?
We agree with the proposed approach to transition. Although the proposed approach is likely
to be more costly than that proposed in the 2010 exposure draft, the proposed approach would
provide users with more relevant and useful information.
However, if the IASB continues with the proposals in relation to OCI, we note that determining
appropriate discount rates at contract inception will be costly, in particular, for long term
insurance contracts. Also, retrospective application of mirroring would be costly.
Furthermore, IFRS 9 and the proposed insurance accounting standard are interrelated with
some interdependent accounting options between the two, in particular for elective designation
of items to be measured at FVOCI to address ‘accounting mismatches’. Because of this
interrelation, the mandatory effective dates of the final insurance accounting standard and IFRS
9 should be aligned.
We note that a number of constituents have expressed support for a period of at least 3 years
between publication of a final standard and the mandatory effective date.
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The likely effects of a Standard for insurance contracts
Question 6
Considering the proposed Standard as a whole, do you think that the costs of complying with
the proposed requirements are justified by the benefits that the information will provide? How
are those costs and benefits affected by the proposals in Questions 1–5?
How do the costs and benefits compare with any alternative approach that you propose and
with the proposals in the 2010 Exposure Draft?
Please describe the likely effect of the proposed Standard as a whole on:
(a) the transparency in the financial statements of the effects of insurance contracts and the
comparability between financial statements of different entities that issue insurance
contracts; and
(b) the compliance costs for preparers and the costs for users of financial statements to
understand the information produced, both on initial application and on an on-going basis.
Because there are insurance accounting requirements in New Zealand, which are relatively
consistent with the IASB’s proposals, adopting the proposed standard is likely to provide only
minimal benefit to users of financial statements of New Zealand insurers. However, adopting
the proposed standard would be costly; in particular, the proposals in relation to OCI, as well as
the ‘mirroring’ requirements and the excessive disclosure requirements. Therefore, in our
context, the costs of adopting the proposals seem to outweigh the benefits. A better balance
between cost and benefit may be achieved if our concerns with the OCI proposals (as well as our
concerns with ‘mirroring’ and unnecessary disclosures) were addressed.
We do, however, agree with the proposals regarding the presentation of insurance contract
revenue and expenses as discussed in our response to question 3 above.
Clarity of drafting
Question 7
Do you agree that the proposals are drafted clearly and reflect the decisions made by the IASB?
If not, please describe any proposal that is not clear. How would you clarify it?
The NZASB recommends that the final Standard specify clearly that the unit of account is at the
portfolio level. Insurers typically manage their business at the portfolio level (not at individual
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contract level). Therefore, accounting for insurance contracts at the portfolio level would be
most consistent with the way in which insurance business is managed.
Paragraph 31 of the Exposure Draft states that an entity shall recognise in profit or loss any
changes in the future cash flows that, in accordance with paragraph 30, do not adjust the
contractual service margin. This paragraph appears to be an unnecessary catch-all paragraph.
Also, the paragraph suggests that, whatever is not considered to affect the CSM, must be
recognised in profit or loss. What affects the CSM then is open to debate. As a result, the
requirements are unclear.
Other areas where further clarity is desirable include the following:
(a) The section on risk adjustments (from paragraph B76 in the Exposure Draft) does not
mention reinsurance. This might imply that the risk adjustment does not take
reinsurance into account.
(b) The Exposure Draft needs to be reviewed to ensure that references to ‘insurance
contract’ and ‘portfolio of insurance contracts’ are appropriate and consistent.
(c) Because the proposed requirements in paragraph 8 of the Exposure Draft regarding
combining contracts, and the requirements in paragraphs 9 to 11, B31 and B32 of the
Exposure Draft regarding separating contracts, do not mirror one another, there is
concern that some contracts may fall in between these requirements.
Other comments
Premium allocation approach
We support allowing the use of the PAA. However, we are concerned about the exemption
from the building block approach (BAA) for contracts with a coverage period of 12 months or
less. This is because this exception is a rule rather than a principle which could result in some
contracts being accounted for using the PAA even if the PAA does not approximate the BAA.
This bright-line rule also provides an opportunity for arbitrage. In particular, many life insurers
could argue that their contracts fall within the 12 month period and so they can apply the PAA
even though the contracts are expected to run for more than 12 months.
We recommend limiting the use of the PAA to only contracts where the PAA approximates the
BAA. Whether the contract coverage period is 12 months or less could be an indicator that the
PAA approximates the BAA, but should not be a condition that qualifies an entity to use the PAA.
The NZASB understands that a reason for specifying a 12 month or less coverage period is to
15
allow entities to apply the PAA without having to investigate whether or not the PAA provides a
reasonable approximation of the BAA. However, the NZASB considers that entities will be able
to assess whether or not the PAA provides a reasonable approximation of the BAA based on
experience.
Unbundling
We support the principle in the proposals. However, some of the related rules and exceptions
are problematic.
Insurance and investment services are often bundled together with investment contracts.
Paragraph 10(b) requires an entity to separate a distinct investment component from a host
insurance contract on the basis set out in Appendix B.
Paragraph B31 sets out a principle that ‘unless the investment component and insurance
component are highly interrelated, an investment contract is distinct if a contract with
equivalent terms is sold, or could be sold, separately in the same market or jurisdiction by the
entity or any other entity’. Paragraph B32 goes on to provide indications of when an investment
component and insurance component would be considered highly interrelated.
Paragraph B32(b) of the Exposure Draft introduces a rule that overrides the general principle –
that if the lapse or maturity of one component in a contract causes the lapse or maturity of the
other, the entity must treat the whole contract as an insurance contract. We consider that this
condition should be only an indicator that an interrelationship exists or an example of an
interrelationship that helps explain the principle.
As a rule, this requirement would mean that some contracts in New Zealand that are currently
unbundled into their insurance and investment components, would not be able to be
unbundled. An example is a product that involves an investment account that is charged with
the relevant insurance premiums, and when a client terminates the investment contract
element there is no longer an account from which premiums are charged. Accordingly, the
whole contract lapses and clients wishing to continue the insurance component are sold a ‘new’
policy. However, for the duration of the bundled policy, there are two distinct components that
can be accounted for separately.
Paragraph B25 of the Exposure Draft includes another rule that compounds the problem caused
by the paragraph B32(b). The further rule states: a contract that meets the definition of an
insurance contract remains an insurance contract until all rights and obligations are
extinguished. That is, a contract that is regarded as an insurance contract at inception must
always be treated as an insurance contract, even though there are products that, at inception
are primarily insurance contracts but which change over time to become primarily investment
16
contracts. We consider that, in these circumstances, the proposals potentially distort the
financial statements by forcing investment components of contracts to be treated as insurance
contracts.
The distortion might become apparent in reconciliations to segment disclosures (required by
paragraph 28 of IFRS 8) because Australian and New Zealand insurers that sell bundled products
generally unbundle them into their insurance segments and wealth segments for management
reporting.
Contract boundary
We agree with the proposals.
Disclosure requirements
The disclosures proposed are too detailed and too onerous. There appears to be increasing
tendency towards requiring disclosure of reconciliations without any underlying basis for this.
The proposed disclosures of reconciliations might help some users to 're-work' the information
to apply their own insurance accounting model; however, financial statements are prepared for
the purposes of meeting common information needs of a wide range of users; not for meeting
multiple individual needs. The NZASB therefore encourages the IASB to reconsider the volume
of disclosures proposed in light of our comments and to respond positively to stakeholders’ calls
to reduce disclosure overload.
