New Zealand


  • Service: Audit, Advisory, Accounting Advisory Services
  • Type: Business and industry issue
  • Date: 16/09/2011

Contact us

Simon Lee

Simon Lee

Technical Director, Accounting Advisory Services

+64 4 816 4678

Accounting Advisory Services

We can help with complex financial reporting regulations, optimise relevant reporting processes and incorporate new requirements.

Reporting news - 11RN04 

Breaking news: Financial Reporting Framework – significant changes proposed for financial reporting in New Zealand. In this special edition we bring you details of the recent Government announcements regarding the changes to the financial reporting framework. 

These proposals will impact which entities have to prepare financial statements, distribute and or file financial statements, and have an audit or review of their financial statements.


In addition, the External Reporting Board (XRB) has released for comment consultation papers concerning the accounting standards frameworks for for-profit entities and public benefit entities.


Ministry of Economic Development – financial reporting framework

In 2009 the MED issued consultation papers seeking feedback on proposals to revise the financial reporting framework in New Zealand.  On 14 September 2011 the Government proposed a number of reforms that will change the reporting requirements for many entities in New Zealand.


The proposals aim to:

  • simplify the financial reporting framework for small and medium-sized businesses and registered charities
  • reduce compliance costs
  • improve and clarify financial reporting requirements of charities.


Specific proposals include:

  • removing the requirement to prepare parent entity financial statements for large companies
  • replace requirement to prepare general purpose financial statements with simplified special purpose financial statement to tax purposes for medium-sized entities
  • require large registered charities to prepare general purpose financial statements (i.e GAAP compliant)
  • require large partnerships to prepare general purpose financial statements.



External Reporting Board: Accounting Standards Framework documents released


Following the Government announcement above, the External Reporting Board has released the following papers.

  • Accounting standards framework for general purpose financial reporting by for-profit entities – consultation paper.
  • Accounting standards framework for general purpose financial reporting by public benefit entities – consultation paper.   Consultation documents
  • Accounting standards framework: a multi standard approach – position paper

XRB Consultation papers


The two Consultation papers outline the XRB's specific proposals for the new accounting standards framework for for-profit and public benefit entities respectively. 


Key proposals set out in the consultation papers include the following.

  • A two tier structure for for-profit entities and the removal of the current exemption that allows small and medium companies to use "old GAAP" (as these entities will for the most part no longer be required to comply with XRB standards).
  • The application of full NZ IFRS for tier 1 for profit entities and the adoption of a Reduced Disclosure Requirements. (RDR) version of NZ IFRS for for-profit tier 2 entities (which will be consistent with that applicable in Australia and which will replace the current New Zealand Differential Reporting Framework).
  • A three tier structure for public benefit entities (which includes registered charities) with all entities with expenses less than $2 million being in Tier 3 - this includes many small public sector entities as well as the majority of registered charities.
  • The establishment of a set of NZ PBE standards based on International Public Sector Accounting Standards modified as appropriate for New Zealand circumstances and also for application by not-for-profit entities.
  • The use of a simple format reporting approach for tier 3 entities.




The XRB is seeking comment on these consultation papers.   The closing date for submissions is Friday 16 December 2011.

XRB position paper


The Position Paper outlines the rationale for the ASRB/XRB’s decision to move to adopt two sets of accounting standards:

  • one set of standards for for-profit entities
  • another set of standards for public benefit entities (public sector and private sector not-for profit entities). 


The XRB is not seeking comments on this paper.


Further detailed analysis of the proposals and how they will affect you will be included in forthcoming issues of KPMG Reporting news.

Share this

Sign up now

Subscribe to selected content and receive email alerts when new content is available for viewing on this site.


Already a member? Login


Not a member? Register