Doing business in New Zealand - Grant Thornton

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NZ IFRS is an adaptation of IFRS to provide financial reporting guidance for not only profit oriented entities, but also for entities that operate in the public and Not for Profit sectors. For listed companies, NZ IFRS is now virtually identical to Australian equivalents of IFRS. The difference between these two bodies of standards and those issued directly by the International Accounting Standards Board is that some additional disclosures are required (eg, disclosure of audit fees). Further details can be found in New Zealand Financial Reporting Standard 44 Additional Disclosures. Companies which satisfy all of the following three criteria are permitted to continue to apply “old NZ GAAP” and, therefore, are not required to apply NZ IFRS until further notice: 1 The company is not an issuer, as defined by the Financial Reporting Act 1993 (the Act), in either the current or preceding accounting period 2 The company is not required by section 19 of the Act to file its financial statements with the Registrar of Companies 3 The company is not “large”, as defined by section 19A of the Act (which also aligns with the size criteria for differential reporting) Companies that are required to prepare financial statements in accordance with generally accepted accounting practice in New Zealand (ie, companies that are not “exempt”) and meet the three criteria will continue to have a choice between two sets of accounting standards, the existing “old NZ GAAP” and NZ IFRS. Audit requirements The financial statements of all companies must be audited, except where shareholders unanimously resolve that no auditor be appointed. That exception does not apply to: • subsidiaries of foreign companies (if there is a New Zealand holding company, and then subsidiaries below that, then only the parent and consolidated financial statements of the New Zealand holding company need be audited) • companies controlled by overseas persons who hold more than 25% of the voting shares, whether directly or indirectly held • entities that raise funds from the public or are listed on New Zealand’s stock exchange (issuers) • branches of foreign companies. On the New Zealand Companies Office website there is a financial reporting calculator where you can check whether or not there is a need for an audit (www. business.govt.nz/companies/learnabout/updating-company-details/ financial-reporting). Differential reporting An entity qualifies for differential reporting exemptions (ie, it is a qualifying entity) when it does not have public accountability and: • at balance date, all of its owners are members of the entity’s governing body • the entity is not “large”. A company is considered “large” where it exceeds any two of the following thresholds: • Total income of $20 million • Total assets of $10 million • 50 employees Doing business in New Zealand 16
From 2013 onward the criteria for determining “large” will be increased. The External Reporting Board, an entity put in place as a result of the Financial Reporting Act 1993, is responsible for determining what the size criteria should be and at this stage has signalled that it will either be total revenue greater than $30 million or total assets greater than $60 million. For public benefit entities (ie, the public and Not for Profit sectors) “large” will be if annual expenditure exceeds $30 million. In contrast to companies, there are no asset or revenue thresholds for public benefit entities. It should be noted that the differential reporting regime that sits behind NZ IFRS is likely to be replaced with a reduced disclosure regime (RDR) similar to that currently in place in Australia. The fundamental difference between the two regimes is that RDR only reduces disclosure; it does not modify any of the recognition and measurement principles present in IFRS. Differential reporting is largely based on IFRS, but it does provide some alternative methods for recognising assets, liabilities, revenue and expenses to reduce compliance costs. completion. All companies required to file financial statements must complete these within five months of balance date, so effectively filing is required within six months of balance date. Penalties for non-compliance The Financial Reporting Act 1993 provides for substantial penalties for the company and each of its directors for non-compliance with: • applicable financial reporting standards (NZ GAAP) • filing requirements with the New Zealand Companies Office. Filing requirements All issuers and foreign owned companies as detailed are required to file their audited financial statements with the New Zealand Companies Office within 20 working days of Doing business in New Zealand 17
Page 1 and 2: Grant Thornton New Zealand 2012 Doi
Page 3 and 4: Foreword If you are planning on doi
Page 5 and 6: • Queen’s Birthday - 1st Monday
Page 7 and 8: • The Credit Contracts and Consum
Page 9 and 10: Imports Import restrictions There a
Page 11 and 12: Branch in New Zealand Registration
Page 13 and 14: Paid parental leave Paid parental l
Page 15: Financial reporting and audit Domes
Page 19 and 20: Attributed foreign income New Zeala
Page 21 and 22: Non-residents Non-resident withhold
Page 23 and 24: Groups Each company in a group file
Page 25 and 26: Individuals Individuals are taxed i
Page 27 and 28: Returns GST returns are filed on a

Doing business in New Zealand - Grant Thornton

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