Financial reporting standards for small-to-medium sized enterprises (SMEs)
Under the Financial Reporting Act 2013, entities that do not fall under the definition of ‘large’ or have ‘public accountability’ do not have to prepare general purpose financial statements in accordance with NZ GAAP. Entities that no longer have to prepare general purpose financial statements under the Financial Reporting Act 2013 are still required to prepare special purpose financial statements for tax purposes. Inland Revenue has provided the minimum requirements for financial statements in an Order in Council. These include:
- a balance sheet, profit and loss, and supporting notes or schedules
- accounts based on double entry cost-based accrual accounting
- tax values utilised for the determination of income and expenditure and preparation of the balance sheet
- a statement of accounting policies and changes
- a reconciliation of the financial statements to taxable income, and
- a schedule of related-party transactions.
BEPS Multilateral Instrument (MLI)
New Zealand signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI) in June 2017. New Zealand has ratified the MLI, and the MLI is now in force in New Zealand.