The Financial Reporting Bill has passed its second reading, with cross-party support for all of the Commerce Select Committee's recommended amendments to the Bill. These included:

  • an exemption for "non-active" entities as provided for under the Financial Reporting Act 1993 (FRA);

  • simplification of the timing requirements for the preparation and registration of financial statements (by removing the intermediate deadline for preparation) to provide entities with more flexibility to allocate time between preparation, audit, and filing;

  • an increase in the time period given to prepare financial statements from within three months to within five months of balance date for entities that are not issuers (or other 'FMC reporting entities' – as classified under the Financial Markets Conduct Bill);

  • an exemption from audit requirements for "large" companies if the company is a wholly-owned subsidiary of a company that has complied with a requirement to lodge or register group financial statements with the Registrar of Companies; and

  • a requirement for limited partnerships that are not large to prepare audited financial statements for an accounting period if partners (who together must have contributed at least 5% of the capital contributions of all the partners) require the limited partnership to do so.

The Bill is the latest stage in the review of New Zealand's financial reporting framework which commenced in 2009 and will replace the FRA and amend a number of other statutes that contain financial reporting obligations for various entities.

An overview of the key changes arising from the Bill is set out in our November 2012 client update: Submissions called on Financial Reporting Bill and further details on the select committee's recommendations are available in our May 2013 client update: Some welcome amendments proposed for the Financial Reporting Bill.