Changes to Financial Reporting Requirements for Companies
From the 1st of April this year the reporting requirements for companies under the Financial Reporting Act has changed, dueto a law change designed with the aim of reducing compliance costs for many ofNew Zealand’s Small and Medium enterprises. Very smallcompanies (companies who have both income and expenses under $30k), will nothave any requirement to produce financial reports.
Themain impact of the law change is for “non-large” companies who have a turnoverof less than $30 million or assets less than $60 million. Non-large companies will no longer berequired to produce financial statements under generally accepted accountingprinciples (“GAAP”). They will instead be allowed to produce “Special PurposeFinancial Reports” which are intended to be simpler. Of course if a companywants to continue with the level of financial reporting they currently havethen they are free to do so.
As IRD is the biggest user offinancial statements, the Government decided that they should be the ones toset the standards of what is required in the Special Purpose FinancialReports. What IRD will be requiring from“non-large” company reporting is as follows:
- Balance sheet, profit and loss statement,and supporting notes and schedules;
- Statement of accounting policies andchanges thereto;
- A financial statements to taxreconciliation;
- Movements in shareholders funds;
- Disclosure of the IR10 data points;
- A schedule of specified associated persontransactions (this requirement is from 1 April 2015)