New Zealand eases reporting rules for smaller firms

Financial reporting burden relaxed for small and medium companies with revenues of NZ$2 mn-NZ$30 mn 

A bill allowing shareholders of small and medium companies to decide whether the firm must prepare financial statements has passed its third reading in the New Zealand parliament.

The Financial Reporting Bill removes the complex and costly reporting requirements for smaller firms, as well as clarifying reporting requirements for charities, says the government.

‘Passing the bill is part of the government’s business growth agenda to improve capital markets and reduce compliance costs,’ explains Craig Foss, commerce minister, in a press statement. ‘The changes will remove some expensive reporting obligations and can reduce compliance costs for many companies with revenues of NZ$2 mn-NZ$30 mn ($1.6 mn-$24.6 mn) a year.’

Companies with an annual revenue of more than NZ$30 mn, or assets of NZ$60 mn or more, which are not classed as smaller but do not meet the definition of ‘large’, will be able to prepare a special purpose financial report (SPFR) rather than a general purpose financial report. While details are yet to be released on SPFR requirements, ‘there will be a reduction in the number of disclosures [small and medium-sized companies] will need to make,’ says the New Zealand government.

The default requirement for small and medium companies with at least 10 shareholders will be to continue preparing general purpose financial reports, adds the government. These companies can opt out of these reporting obligations, however, if 95 percent of voting shares support the motion.

Equally, small and medium companies with fewer than 10 shareholders will have to prepare the lengthier general purpose statements only if shareholders representing at least 5 percent of voting shares require it. ‘With the financial reporting burden lifted, smaller companies will be able to focus their time and energy on growing their businesses, innovating and creating jobs,’ says Foss. 

0 comments

You must be registered to comment.

Please Sign In or Register.

Revealing the full picture: Your guide to ESG reporting

London Stock Exchange Group has issued guidance, through its Global Sustainable Investment Centre, setting out recommendations for good practice in ESG reporting. The global guide responds to demand from investors for a more consistent approach to ESG reporting, which is now a core part of the investment decision-making process. The white paper helps companies gain a clear understanding of what ESG information investors would like to see.

Download this report from London Stock Exchange Group here >>

ELITE Connect

ELITE Connect, the digital platform from London Stock Exchange Group, facilitates the relationships between listed companies, investors and intermediaries, allowing users to connect worldwide at any time. Solutions include digital meetings and webcasting of financial results, in addition to a range of event-management functionalities and IR digital services. To learn more and join us, please go to www.elite-connect.com.

We use cookies to make our website function properly and deliver our services. By using our website, you agree to our use of cookies, please click here to learn how to manage and delete cookies.