Financial reporting obligations in New Zealand
Australian companies are increasingly establishing subsidiaries or branches in New Zealand, however, there are financial reporting and filing requirements that need to be considered. These vary according to type, size and ownership. There is no “one size fits all”.
The New Zealand financial reporting framework consists of two parts:
- The statutory financial reporting framework, which sets out the statutory preparation, audit and filing requirements for various types of entities; and
- The accounting standards framework, which establishes the accounting standards to be applied by entities with statutory reporting obligations.
Statutory Financial Reporting Framework
The statutory financial reporting framework is applicable to New Zealand registered companies with 25% or more foreign ownership or overseas companies operating in New Zealand as a branch. This covers most of the investments in New Zealand by foreign entities. There are different requirements, inter alia, for companies with 10 or more shareholders, partnerships, retirement villages and public benefit entities and you should seek specific advice regarding these.
The following table sets out the reporting framework applicable to many of the entities operating in New Zealand with foreign ownership.
Audited financial statements must be filed with the Companies Office within four months of balance date for FMC reporting entities and five months for other companies.
The Accounting Standards Framework
Having decided whether or not the entity must prepare General Purpose Financial Reports (GPFR) in accordance with New Zealand generally accepted accounting practice (NZ GAAP) the next decision is which standards to apply.
If the entity has no statutory financial reporting obligation, you may still choose to prepare financial statements in accordance with NZ GAAP. Alternatively, your entity may report on another basis and comply, as a minimum, with the requirements specified by the Inland Revenue. Such statements are “Special Purpose”.
Those entities preparing GPFR must apply the applicable Tier reporting (see table below).
The New Zealand financial reporting requirements can be complex. For those operating a branch or subsidiary in New Zealand we recommend checking on your reporting requirement with your nearest PKF adviser.