• Service: Tax, International Tax
  • Type: Regulatory update
  • Date: 11/20/2013

New Zealand - Proposed financial statement requirements for SMEs 

November 20:  New Zealand’s Inland Revenue Department is proposing minimum requirements for small and medium-size enterprise (SME) financial statements to support SME tax returns.

Inland Revenue’s role arises from the removal of the need for SMEs to prepare general purpose financial statements. As a major recipient of financial information, Inland Revenue has an interest in what will replace those statements, and it is expected the requirements are likely to form the basis of many special purpose financial statements.

Possible required statements

The minimum requirements could include:

  • Financial statements (i.e., balance sheet, profit and loss statement, and supporting schedules) based on double entry cost based accrual accounting
  • Use of tax values to determine income/expenditure when possible (e.g., fixed assets and depreciation)
  • Reconciliations of taxable and accounting income, tax losses, and imputation credits carried forward and used
  • Disclosures of available subscribed capital, capital gains, and related-party transactions

Inland Revenue’s primary focus is on the requirements for corporate SMEs (this is proposed to be effective for income years beginning on or after 1 April 2014). The requirements for non-corporate entities are expected to apply a year later.

KPMG observation

Observers have noted that Inland Revenue’s proposal would formalize the need for SMEs to track their available subscribed capital and tax-free capital gains. SMEs that have not tracked these amounts historically would need to recreate these balances. An extension in the application date for providing this information and/or the amounts being statute-barred might be warranted.

Read a November 2013 report [PDF 69 KB] prepared by the KPMG member firm in New Zealand: Inland Revenue proposes minimum financial reporting requirements for SMEs

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.


Share this

Share this


Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)

Already a Subscriber? Login

Not a member? Subscribe now