Accounting Alert - October 2009 (Special Alert)The big overhaul – the future of financial reporting in New Zealand |
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Financial reporting crossroads
With the release of the MED's 80-page Statutory Framework for Financial Reporting discussion document on 30 September 2009, New Zealand finds itself at a financial reporting crossroads.
The time has come for key decisions to be made about the future of financial reporting in this country. The document emerges amongst the hue and cry that the IFRS framework is too big for many NZ entities, and as criticisms are made about the unsuitability of IFRS for public sector and not-for-profit entities.
The proposals will have some far reaching consequences including:
- Small closely held companies, in particular small overseas owned and incorporated entities, may find that they no longer have any legislative financial reporting requirements.
- Large for-profit entities other than companies will be brought within the financial reporting regime.
- Many not-for-profit entities will become subject to financial reporting preparation, audit and filing requirements.
- Large, privately-held companies may be required to file audited financial statements. The MED is seeking feedback on applying the approach taken in Australia which exempted companies that existed when the legislation came out (a “grandfathering” provision), but required new entities that met the economic significance criteria to file their audited financial statements.
Changes in the accounting standards are also proposed.
This financial reporting review is a significant undertaking and there are challenges to make sure New Zealand “gets it right” for all entities. The papers are open for discussion and a number of questions are set out within them that affected entities should be discussing – they are not a fait accompli and we would encourage you to make your voice heard in the form of a submission which will need to be in by 29 January 2010.
Accounting Alert - the future of financial reporting - October 2009
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