| Should the revised GRAP 104 and GRAP 25 be applied now? |
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The ASB revised the Standards on financial instruments and employee benefits. The ASB revised GRAP 104 in 2019 to align it with IFRS 9 on Financial Instruments and GRAP 25 in 2021 to align with IPSAS 39 on Employee Benefits.
We have received a number of queries about whether the revised versions of GRAP 104 and GRAP 25 are effective and whether they should be applied in preparing the financial statements for 2020/21. The answer is…no…
Standards of GRAP – or any amendments to those Standards - cannot be applied until they are effective. The Minister of Finance approves the effective date of new, or revised, Standards of GRAP.
Financial instruments
The Minister of Finance published a Government Gazette Notice in April 2021 proposing an effective date of 1 April 2024 for the revised GRAP 104. Given the expected timing of the publication of the final Gazette, it is anticipated that the final effective date will be 1 April 2025.
The effect of the proposed effective date being 1 April 2025, is that entities will not be required to adopt the revised GRAP 104 until the 2025/26 reporting period. Once an effective date has been announced by the Minister of Finance, entities may early adopt the revised GRAP 104. However, entities will need to early adopt the Standard in its entirety – piecemeal adoption is not permitted.
Employee benefits
The Minister is yet to publish a Government Gazette with the proposed effective date for the revisions to GRAP 25. The effective date proposed during the public consultation process was 1 April 2023.
The same transitional arrangements for GRAP 104 apply to GRAP 25.
Delayed effective dates allow time to plan for the adoption
Despite the proposed effective dates being a number of years in the future, delayed effective dates were proposed so that entities have sufficient time to prepare for the implementation of the Standards. As all entities have at least some financial instruments, entities will need to think about how to revise their policies, processes, systems and controls to ensure that the information required by the Standard is available. Don’t wait until the last minute!
A number of resources have been made available on the ASB’s website to assist with the implementation of the Standard. Follow this link.
Posts for Twitter, Facebook, LinkedIn (post as soon as finalised)
Status of revised Standards of GRAP on financial instruments (revised 2019) and employee benefits (revised 2021)
The revised Standards are not yet effective and should not be applied in preparing the financial statements for 2020/21 reporting periods. The Standards cannot be early adopted, or used in any way in preparing the financial statements.
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