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New Zealand to simplify reporting framework for SMEs

The New Zealand government has unveiled proposals simplifying the financial reporting framework for small and medium-sized businesses and registered charities.

The proposed reforms are a response to a review which found the financial reporting framework too costly and ineffective.

Under the new proposals, non-issuer companies which do not meet the definition of large companies, which have an annual turnover of more than $30m, or assets of more than $60m, will be asked to prepare targeted reports for tax purposes, rather than financial statements under the Companies Act.

The government said the changes will reduce the number of companies required to prepare general purpose financial reporting from 460,000 to less than 10,000 and the changes are expected to cut business compliance costs by $90m a year.

“The new framework will promote accountability of senior management and ensure people with an interest in the economic performance of a company can have confidence in the information they receive,” New Zealand government commerce minister Simon Power said.

The External Reporting Board is expecting to release a consultation shortly and will continue to consult with the community and voluntary sector in the process of creating the simple format reports for charities.

 

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