Another step towards simplified compliance

Government and industry reform of financial reporting in New Zealand – and a refreshed accounting framework to underpin it – has had a long gestation and is by no means a done deal yet. Yesterday, another step forwards was taken with the Commerce Select Committee producing a set of recommendations for amendments to the all-important Financial Reporting Bill.

Financial reporting is a hot topic for the accounting industry. Reporting requirements and thresholds for many entity types will change over time, driven by the desire for simpler compliance for small entities and clearer guidelines for charities and larger entities.

Xero is keeping a close eye on developments and will make sure that any changes are seamlessly integrated (most likely to the Report Pack part of the application) as and when necessary. Good accounting software that is regularly updated not only for new features and functionality, but also for financial reporting reform, is a must.

Most of the recommendations made by the Committee yesterday will have limited application. The exception is the recommendation to increase the threshold at which a not-for-profit entity must prepare financial statements on an accrual rather than cash basis. This will be a relief to the many small charities who will be able to utilise the simpler cash-based reporting method.

The legislative activity is just one moving part in the overall reform. Other key parts involve the IRD and NZICA, each of which will have considerable weight in terms of final outcomes for business owners and their accountants.

So what does this all mean for the business man or woman going about their day-to-day activity? Is the level of change going to be significant?

Well, for the majority of organisations it really is business as usual. Change, if any, will be gradual. In many cases, there will be no discernable change at all and day-to-day accounting is unlikely to be affected.

Of course, your accountant should be able to advise as to any possible impact when the new reporting regime is finalised. If you don’t have an accountant, there’s no better time to make sure you have the experience and up-to-date knowledge of a trusted professional.

So for now, the journey continues and we aim to keep you informed as the milestones pass.

One Comment

Gayle Buchanan
May 23, 2013 at 5:45 pm

thanks for the update Richard, really appreciate it

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Payroll for South Dakota, Wyoming, Washington

Following up on the continued momentum from the last release of New Hampshire — we’re excited to announce Payroll in Xero availability for South Dakota, Wyoming and Washington. Over 100,000 small businesses in South Dakota, Wyoming and Washington employ at least one employee. Xero is truly excited to provide an accounting and payroll solution that ...

The new look Xero Android app

We’re pleased to announce the biggest release since the native version of our Xero Android app. Every pixel of the dated Android 4.x ‘Holo’ look is gone! Xero now follows Google’s ‘Material’ design guidelines. We’ve revisited every single screen with an eye on consistency and #beautiful design. We think you’ll find it a vast improvement. ...