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Changes to Financial Reporting Obligations

Changes to the Financial Reporting Act 2013 mean a large number of small-to-medium enterprises (SMEs) will no longer need to prepare general-purpose financial statements.  Instead, SMEs will need to prepare new special purpose financial statements to minimum requirements set by IRD.

Under the Act, New Zealand private companies will not have to produce general-purpose financial statements unless they are "large". A company is "large" if it:

-       Has total assets of more than $60 million; or

-       Has total revenue of more than $30 million.

On 13 November 2013 IRD released an officials' issues paper, Minimum financial reporting requirements for companies, outlining the proposed minimum requirements for special-purpose financial statements. Click here for an overview of the Proposed Minimum Financial Reporting Requirements.

According to Commerce Minister Craig Foss the changes lift the financial reporting burden from many companies, allowing them to "focus their time and energy on growing their businesses, innovating and creating jobs."

The Minimum Reporting Requirements are not yet set and submissions can be made on the IRD Issues Paper up to 20 December 2013.

We are not in the business of providing accounting or financial advice. We will however be keeping an eye on developments as they impact SMEs and will keep you updated.

- Kylie van Heerden.

 

Written by Kylie van Heerden at 12:00

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