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Financial reporting framework review

Following on from a review of New Zealand’s financial reporting framework, a number of reforms have been proposed that will change the reporting requirements of small and medium-sized businesses and registered charities, and a number of smaller changes will affect a range of different entities.

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Changes for small and medium companies

The financial reporting obligations for small and medium-sized non-issuer companies are being simplified. Companies that do not meet the definition of large (annual revenue of more than $30 million, or assets of $60 million or more) will no longer be required to prepare general purpose financial reports. Instead they will just need to prepare special purpose financial reports (SPFR).

The New Zealand Institute of Chartered Accountants will develop the revised requirements and produce a set of guidelines that will provide a consistent approach for the preparation of SPFR, and Inland Revenue will base its minimum standards for reporting on these revised requirements.

For more information see: Q and A for financial reporting changes for companies [69 KB PDF]



Changes for registered charities

The Government has decided that large and medium-sized registered charities will be required to have their annual financial statements independently audited or reviewed by a qualified accountant. For more information see Assurance for Registered Charities.



Summary of changes to the financial reporting system

The following table outlines changes for companies, the charitable sector, and other impacted entities.

Class of entity

Change and impact

Large companies

Remove the requirement to prepare parent entity financial statements and leave it to the XRB to determine any parent company reporting obligations.

Medium-sized companies

Replace General Purpose Financial Reporting (GPFR) preparation requirements with Special Purpose Financial Reporting (SPFR) for tax purposes to minimum standards set by Inland Revenue.

Small companies

Replace simple format template reporting with SPFR for tax purposes to minimum standards set by Inland Revenue. 


The time within which companies, with preparation obligations, need to prepare financial reports will be reduced from five months to three months.

Subsidiary companies

Where a group of companies has reporting obligations, they are no longer required to prepare a set of financial statements for the parent company. The obligation to prepare consolidated statements remains.

Medium and small limited partnerships

Replace the existing preparation requirement with special purpose reporting for tax purposes to minimum standards set by Inland Revenue.

Large limited partnerships and partnerships

Introduce requirements to prepare GPFR, have them audited and distribute to the owners.

Registered charities

Require the preparation of GPFR prepared in accordance with standards set by the XRB. The XRB has indicated that it is likely to use a simple format reporting approach for entities with operating expenditure <$2 million.

Micro registered charities (annual operating expenditure <$40,000)

Allow GPFR (which is likely to be simple format) to be prepared on a cash basis.

Medium and small industrial and provident societies

Retain a requirement to file an annual return with the Registrar but remove the requirement to include financial statements.

Friendly societies that offer insurance services, and credit unions

Retain the requirement to file audited financial statements but remove the requirement on the Registrar to monitor them and report to Parliament.

Other friendly societies

Retain preparation, assurance and distribution to members, but remove the filing requirement.

Gaming machine societies that operate gaming machines in commercial venues

Publication obligations vary according to the society’s legal form.  Introduce a consistent requirement to file audited financial statements.

Gaming machine societies that operate gaming machines almost exclusively in their own premises

Require societies to distribute audited financial statements to members but do not introduce a publication requirement.

Retirement villages

All retirement villages are treated as though they are issuers for financial reporting villages.  Remove that presumption for those that are not issuers in a real sense, which would allow the XRB to decide whether they could report in accordance with the second rather than the top tier of reporting.

Large Māori incorporations

In addition to the current preparation and audit requirements, require distribution to all beneficial owners.

Medium and small Māori incorporations

Remove the audit requirement.

Māori land trusts

Empower the XRB to set default reporting requirements, but allow the Maori Land Court to vary those requirements to meet individual circumstances.


Background information

External Reporting Board


Consultation on audit and assurance for registered charities

MBIE is inviting written submissions on a "concrete proposals" discussion paper on audit and assurance for large and medium-sized registered charities.

Read more about Consultation on audit and assurance for registered charities

Audit and assurance for Registered Charities

The Government has decided that registered charities with annual operating expenditure of $500,000 or more will be required to have the financial statements they file with their annual returns to be assured by a qualified accountant.

Read more about Audit and assurance for Registered Charities

Last updated 17 September 2013