Update on changes to the statutory financial reporting framework
Legislation has been enacted which for many entities will change the requirements for preparation, audit and filing of financial statements.
The Financial Reporting Act 2013 and Financial Reporting (Amendments to Other Enactments) Act 2013 are the product of several years of consultation and debate, with the most significant changes to financial reporting being:
- the removal of the requirement for most small and medium companies to prepare financial statements in accordance with generally accepted accounting practice
- the introduction of reporting requirements for registered charities, partnerships and limited partnerships
- the removal of the requirement for companies and issuers to prepare parent financial statements when group financial statements are already provided
- a reduction in filing deadlines for some entities, and
- the alignment of the penalties regime.
In addition to legislative changes, the External Reporting Board (XRB) has changed the accounting standards framework, which applies if entities are required to prepare financial statements in accordance with generally accepted accounting practice (GAAP). The standards are issued across three sectors – for-profit entities, public benefit entities in the public sector, and other public benefit entities (referred to as ‘not-for-profit’ entities), with up to four different tiers for reporting within each sector.
For more information on these changes, refer to the following documents:
December 2013 Accounting Alert - Staying on top of developments
Financial Reporting Act 2013 enacted providing clarity on the financial reporting obligations of New Zealand entities.
The documents answers some frequently asked questions for for-profit entities based on the financial reporting legislative changes and the accounting standards framework as finalised by the XRB.