Financial Reporting for Small Companies (the Exempt Company System)
Under reforms announced by Minister of Commerce Hon Lianne Dalziel, the number of companies qualifying for the exempt companies system will significantly increase. Under the new system, closely-held companies will qualify if they meet two out of three of the following criteria:
- Annual turnover of less than $2 million
- Total assets of less than $1 million
- Five or fewer full time equivalent employees
There will be further consultation in 2006 on whether exempt companies should have any financial statement preparation requirements. This will be covered in a discussion document to be released later in 2006, tentatively entitled "Auditor Regulation and Some Financial Reporting Issues".
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