Published 16 September 2011
Commerce Minister Simon Power announced proposals on Wednesday to simplify the financial reporting framework for small & medium-sized businesses & registered charities.
The proposed reforms follow on from a review of the financial reporting framework, which found the framework was overly costly and not meeting users’ needs or expectations.
Under the new regime, non-issuer companies which don’t meet the definition of large companies (annual revenue of more than $30 million, or assets of more than $60 million) will be asked to prepare targeted reports for tax purposes, rather than financial statements under the Companies Act.
Mr Power said the changes would reduce the number of companies required to prepare general purpose financial reporting from 460,000 to fewer than 10,000, and would cut business compliance costs by an estimated $90 million/ year.
He said the Institute of Chartered Accountants would work closely with Inland Revenue & other users to develop the revised requirements.
Mr Power said the changes would also improve financial reporting by charities. They weren’t subject to financial reporting standards and it was unclear what they needed to file with the Charities Commission.
The External Reporting Board would release consultation papers soon and the Government would introduce a Financial Reporting Amendment Bill next year.
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Attribution: Ministerial release, story written by Bob Dey for the Bob Dey Property Report.