Good news for 95 percent of New Zealand companies
New financial reporting requirements coming into force tomorrow are a positive development for New Zealand small and
medium businesses, says John Hodge, General Manager - Technical and Quality Assurance at the New Zealand Institute of
Chartered Accountants (NZICA).
The new Financial Reporting Act means that up to 95 percent of New Zealand companies may no longer have to meet
previously-prescribed financial reporting standards. Many will still have to produce accounts for the Inland Revenue
Department.
Last month the IRD issued its minimum financial reporting requirements for these companies.
“Chartered Accountants are well placed to provide advice and information to their business clients to help them adapt to
the new requirements,” says Mr Hodge.
“NZICA has contributed to the development of the new requirements, working with key Government agencies to provide
policy input.”
NZICA is developing new, optional, reporting guidelines that will give small and medium New Zealand businesses the tools
to easily and consistently record and manage the financial health of their businesses. These Special Purpose Financial
Reporting guidelines will also be useful for companies when dealing with shareholders, boards, lenders and
simultaneously meeting the IRD minimum requirements.
“The NZICA Small to Medium Enterprises (SME) guidance package will provide credible and flexible accounting guidance to
preparing simplified financial statements” commented Mr Hodge.
The NZICA SME guidance package includes three sets of illustrative financial statements aimed at what NZICA views as the
most common New Zealand SME industry groups. This package will be available from NZICA in the near future.
NZICA, in conjunction with the IRD and the External Reporting Board (XRB), delivered a series of roadshows around New
Zealand during February and March. The purpose of the roadshows was to explain the recent changes to financial reporting
resulting from the Financial Reporting Act.
NZICA is also developing an interactive Financial Reporting Tool that will provide further practical help to chartered
accountants and their clients.
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