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BC4. In 2016 the NZASB noted that, pending the development and completion of IPSAS 41 and a PBE Standard based on IPSAS 41, for-profit entities applying NZ IFRS 9 Financial Instruments and PBEs applying PBE IPSAS 29 Financial Instruments Recognition and Measurement would be subject to different requirements. These differences were expected to have a significant impact on mixed groups with requirements to report in accordance with standards issued by the XRB.
BC5. The NZASB considered whether to wait for the IPSASB to develop a new standard based on IFRS 9 or whether to develop an interim PBE Standard based on IFRS 9 for application by PBEs. In considering these options the NZASB had regard to the Policy Approach to Developing the Suite of PBE Standards (PBE Policy Approach) and sought feedback from constituents. After careful consideration (as documented in the Basis for Conclusions on PBE IFRS 9), the NZASB decided to develop an interim PBE Standard based on IFRS 9. The NZASB issued PBE IFRS 9 Financial Instruments in January 2017. PBE IFRS 9 was available for early adoption but had an extended effective date (1 January 2021) in order to allow time for the IPSASB to develop a standard based on IFRS 9.5
BC6. The development of PBE IFRS 9 was a limited scope project intended to meet the most pressing issues that mixed groups would encounter when NZ IFRS 9 became effective. In order to minimise differences between PBE IFRS 9 and a future PBE Standard, the NZASB:
(a) incorporated the modifications that the IPSASB made when developing IPSAS 29 in PBE IFRS 9; and
(b) limited the scope of the project to the updated recognition and measurement requirements in IFRS 9. The project did not address other updated requirements (such as the more recent offsetting requirements in NZ IFRS), as the NZASB preferred to wait for the IPSASB to consider these matters.
5 The NZASB subsequently deferred this effective date to 1 January 2022 so that PBE IFRS 9 did not become mandatorily effective before PBE IPSAS 41.