New Zealand Companies - Financial Reporting

The Financial Reporting Act 1993
All companies and issuers (entities which issue securities to the public) are obliged to complete financial statements in accordance with the requirements of the Financial Reporting Act 1993.
The Financial Reporting Act established the Accounting Standards Review Board. The primary function of this Board is to review and approve "financial reporting standards", which are standards that prescribe the content of financial statements.

Content of Financial Statements Under the Financial Reporting Act 1993, all companies are either "reporting entities" or "exempt companies".
Reporting entities are:

• Issuers

• Overseas companies

• Subsidiary companies

• Companies that have one or more subsidiaries

• Companies with assets valued at more than $450,000

• Companies with a turnover in excess of $1,000,000
  
  Every reporting entity must have a balance date in each calendar year. A newly formed entity need not have a balance date in the calendar year in which it is incorporated, if its first balance date in the following calendar year is not later than 15 months after its formation.
  Every reporting entity must complete financial statements within 5 months of its balance date, or such shorter period as may be required by any other Act.
  
  The financial statements of a reporting entity must:

• include a balance sheet

• include a profit and loss statement, where the entity is trading for profit

• include an income and expenditure statement, where the entity is not trading for profit

• include a statement of cash flows, where this is required by a financial reporting standard

• comply with generally accepted accounting practice

• provide additional information where necessary to give a true and fair view of the financial position of the entity

• be signed and dated by two directors, or, if the entity has only one director, by that director.
  
  Exempt entities are:

• All companies, other than reporting entities.
  
  Every exempt company must have a balance date in each calendar year. A newly formed entity need not have a balance date in the calendar year in which it is incorporated, if its first balance date in the following calendar year is not later than 15 months after its formation. Every exempt company must complete financial statements within five months of its balance date or, if all the shareholders of the company agree, within nine months of its balance date.
  
  The financial statements of an exempt company must:

• include a balance sheet

• include a profit and loss statement, where the company is trading for profit

• include an income and expenditure statement, where the company is not trading for profit

• comply with the form of and directions as to the preparation of financial statements prescribed in the Financial Reporting Order 1994

• be signed and dated by two directors, or, if the company has only one director, by that director.
  
  Registration of Financial Statements
  The only entities that are required to register their financial statements are:

• issuers of securities to the public

• overseas companies

• subsidiaries of a company incorporated outside New Zealand

• companies in which 25% or more of the voting power is controlled by a company incorporated outside New Zealand, or by a person resident overseas.
  
  These entities must deliver the following items to the Registrar of Companies within 20 working days of completing their financial statements copies of:

• the financial statements

• any group financial statements

• the fee of $100 (GST inclusive) for registration of the financial statements.

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