The New Zealand Companies Act 1993 requires all large companies to prepare and, for overseas companies and subsidiaries of overseas companies, to file audited financial statements with the New Zealand Companies Office (Companies Office). The definition of ‘large’ is contained in section 45 of the Financial Reporting Act 2013. Companies are ‘large’ if either total assets or total revenue exceeds certain thresholds in an entity’s preceding two reporting periods. The recent Financial Reporting (Inflation Adjustments) Regulations 2021 made inflation-related adjustments to these asset and revenue thresholds.
Australian entities impacted by these amendments are:
Preparers should take note of the new reporting thresholds because these entities may no longer be ‘large’, and financial statements may no longer be required to be filed with the Companies Office.
The table below shows the current thresholds, as well as the revised thresholds introduced by the Financial Reporting (Inflation Adjustments) Regulations 2021:
Overseas company (e.g. an Australian company with a New Zealand branch) or subsidiary of an overseas company (s45(2)) | Current s45 requirements | New thresholds |
Total assets* | $20 million | $22 million |
Total revenue* | $10 million | $11 million |
New Zealand companies other than overseas companies or subsidiaries of overseas companies (s45(1)) | Current s45 requirements | New thresholds |
Total assets* | $60 million | $66 million |
Total revenue* | $30 million | $33 million |
*On a group basis, i.e. for the company and its subsidiaries |
No. A company is large in respect of an accounting period if at least one of the above thresholds is met:
It is important to note that we do not assess the thresholds for the current accounting period, but rather for the two preceding periods.
These regulations come into force on 1 January 2022. This means that entities with a year ending on or after 1 January 2022 must apply the new size limits. A company with a year ending 31 December 2021 would apply the old thresholds but one with a 31 January 2022 year-end would apply the new size limits.