As previously signalled by the Government, the remaining provisions of the Financial Reporting Act 2013 (FRA) and most of the Financial Reporting (Amendments to Other Enactments) Act 2013 came into force on 1 April 2014 under the Financial Reporting Legislation Commencement Order 2014.
The financial reporting framework introduced by these Acts will impact a wide range of entities. Most small and medium sized companies will no longer be required to prepare general purpose financial statements, whereas large partnerships will be subject to a new statutory obligation to prepare such statements. The changes also introduce a requirement for registered charities to prepare general purpose financial statements, although these will not come into force until 1 April 2015.
The FRA replaces the Financial Reporting Act 1993 and contains new financial reporting requirements for a range of entities. The Financial Reporting (Amendments to Other Enactments) Act 2013 makes amendments to a large number of enactments (including the Companies Act 1993 and the Financial Markets Conduct Act 2013) so that the financial reporting duties of different entities are set out in specific legislation relating to the type of entity. The amended enactments refer back to the FRA for definitions and key concepts.
In general, the financial reporting changes will apply only in relation to accounting periods that commence on or after 1 April 2014 for for-profit entities. The former law continues to apply to accounting periods that commence before that date (that is, 31 March 2014 year-ends) and there are transitional provisions in place for some entities.
For further details on the changes under the new financial reporting regime see our earlier client update here.
The following regulations, which were enacted to amend principal regulations that are affected by the implementation of these Acts, also came into effect on 1 April:
Click here to view table.
FMA transitional guidance for FMC reporting entities
The Financial Markets Authority (FMA) has indicated that it will be releasing guidance to assist FMC reporting entities work out which Act they need to report under for each financial year during the transitional period. This guidance will be available on FMA’s website here.