Sector-Neutral Accounting Standards: A Ten-year Experiment

Victoria University, Wellington, NZ, Centre for Accounting, Governance and Taxation Research Working Paper No. 48

20 Pages Posted: 16 Aug 2008

See all articles by Michael E. Bradbury

Michael E. Bradbury

Massey University

Rachel F. Baskerville

Victoria University of Wellington - School of Accounting and Commercial Law

Date Written: 2007

Abstract

In 1992, New Zealand adopted a sector neutral approach to standard setting - where the difference in accounting treatment is driven by differences in the nature of transactions and not by ownership or the objectives of the reporting entity. In the process of adopting International Financial Reporting Standards, New Zealand standard setters are currently struggling to maintain sector neutrality in financial reporting because international standards are primarily developed for profit oriented entities. With the possible loss of sector neutral financial reporting, it is appropriate to review the outcome of ten-year experiment. In particular, we focus on the impact that transactions that are common to a number of public benefit entities have on accounting standards that apply to profit orientated entities. The results of this review may be useful to future standard setters and to the joint FASB/IASB convergence project.

Keywords: sector-neutral,sector bending, public sector, New Zealand, accounting standard setting, IFRS hamonisation

JEL Classification: M50

Suggested Citation

Bradbury, Michael E. and Baskerville, Rachel F., Sector-Neutral Accounting Standards: A Ten-year Experiment (2007). Victoria University, Wellington, NZ, Centre for Accounting, Governance and Taxation Research Working Paper No. 48. Available at SSRN: https://ssrn.com/abstract=1220843 or http://dx.doi.org/10.2139/ssrn.1220843

Michael E. Bradbury

Massey University ( email )

School of Accountancy
Private Bag 102 904
Auckland
New Zealand
64 9 414 0800 (Phone)
64 9 441 8133 (Fax)

Rachel F. Baskerville (Contact Author)

Victoria University of Wellington - School of Accounting and Commercial Law ( email )

Faculty of Commerce and Administration
PO Box 600
Wellington
New Zealand
006444636951 (Phone)
006444635076 (Fax)

HOME PAGE: http://www.victoria.ac.nz/sacl/staff/rachel-baskerville.aspx

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