Financial Reporting Act 1993

1: Short Title and commencement
1: This Act may be cited as the Financial Reporting Act 1993.
2: Except as provided in subsection (3), this Act shall come into force on the date on which it receives the Royal assent.
3: Part 2 section 12 Part 4 section 43 Schedule 2
1: Interpretation and application
2: Interpretation
1: In this Act, unless the context otherwise requires,— accounting period applicable financial reporting standard section 28(4) auditing and assurance standard section 24 balance date section 7 Board section 22 chief executive section 2 company
a: section 2 of the Companies Act 1955
b: section 2 as the case may be, and includes an overseas company Crown section 2 Crown entity section 10 department section 2 director
a: in relation to a company, a person occupying the position of a director of the company by whatever name called:
b: in relation to a partnership (other than a special partnership or limited partnership
c: in relation to a special partnership or limited partnership
d: in relation to a body corporate or unincorporate, other than a company or a partnership or a special partnership or limited partnership
e: in relation to a unit trust (within the meaning of section 2
f: in relation to any other person, that person entity
a: a company; or
b: an issuer equity security
a: an interest in or right to a share in the share capital of a company; or
b: an interest in or right to participate in any distribution of profits or surplus assets of a company;— and includes a preference share, company stock, and any renewal or variation of the terms and conditions of any existing equity security exempt company section 6A financial reporting standard section 24 financial statements section 8 FMA Part 2 Financial Markets Authority Act 2011 generally accepted accounting practice section 3 group group financial statements section 9 infringement fee infringement notice section 41B infringement offence section 38(b) 39 interim accounting period issuer section 4 licensed auditor section 6 licensed insurer section 6(1) local authority Local Government Act 2002 Minister Office of Parliament section 2 overseas company section 332 registered audit firm section 6 Registrar
a: in relation to an issuer that is—
i: a society; or
ii: a branch of a society; or
iii: a credit union— registered or deemed to be registered under the Friendly Societies and Credit Unions Act 1982 section 2
b: in relation to any other entity, the Registrar of Companies, the Deputy Registrar of Companies, a District Registrar of Companies, and an Assistant Registrar of Companies reporting entity
a: an issuer; or
b: a company, other than an exempt company; or
c: a person that is required by any Act, other than this Act, to comply with this Act as if it were a reporting entity security
a: an interest in or right to be paid money that is deposited with, lent to, or otherwise owing by any person (whether or not the interest or right is secured by a charge over property); and
b: a renewal or variation of the terms or conditions of an existing security specified standard
a: a financial reporting standard; or
b: an auditing and assurance standard subsidiary section 158 of the Companies Act 1955 sections 5 to 8 turnover
a: means, in relation to a company, the total annualised gross operating revenue of the company (exclusive of any tax required to be collected) reported in the statement of financial performance, income and expenditure statement, or revenue and appropriation account, as the case may be, for the accounting period for which the financial statements are required; and includes (without limitation) any sales, fee income, grants, output appropriations, cost recoveries, donations, dividends, interest, and subscriptions of the company for that accounting period:
b: means, in relation to a group, the total annualised gross operating revenue of the group (exclusive of any tax required to be collected) reported in the consolidated statement of financial performance or consolidated income and expenditure statement, as the case may be, for the accounting period for which the financial statements are required; and includes (without limitation) any sales, fee income, grants, output appropriations, cost recoveries, donations, dividends, interest, and subscriptions of the group for that accounting period working day
a: Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, the Sovereign's birthday, Labour Day, and Waitangi Day; and
ab: if Waitangi Day or Anzac Day falls on a Saturday or a Sunday, the following Monday; and
b: a day in the period commencing with 25 December in any year and ending with 2 January in the following year; and
c: if 1 January in any year falls on a Friday, the following Monday; and
d: if 1 January in any year falls on a Saturday or a Sunday, the following Monday and Tuesday.
2: Where the last day of the period prescribed under section 18 section 19
a: in the case of financial statements that are required to be delivered to the Registrar of Friendly Societies and Credit Unions, the office of the Registrar of Friendly Societies and Credit Unions is situated; or
b: in the case of any other reporting entity, the office of the appropriate Deputy Registrar of Companies or District Registrar of Companies or Assistant Registrar of Companies is situated— the financial statements or group financial statements may be delivered on the next working day. Section 2(1) applicable financial reporting standard substituted 1 July 2011 section 5(2) Financial Reporting Amendment Act 2011 Section 2(1) approved financial reporting standard repealed 1 July 2011 section 5(1) Financial Reporting Amendment Act 2011 Section 2(1) auditing and assurance standard inserted 1 July 2011 section 5(2) Financial Reporting Amendment Act 2011 Section 2(1) Board substituted 1 July 2011 section 5(2) Financial Reporting Amendment Act 2011 Section 2(1) Crown entity substituted 25 January 2005 section 200 Crown Entities Act 2004 Section 2(1) director amended 2 May 2008 section 121(1) Limited Partnerships Act 2008 Section 2(1) director amended 2 May 2008 section 121(1) Limited Partnerships Act 2008 Section 2(1) director amended 2 May 2008 section 121(1) Limited Partnerships Act 2008 Section 2(1) director substituted 1 October 1997 section 2 Financial Reporting Amendment Act (No 2) 1996 Section 2(1) exempt company substituted 22 November 2006 section 4(1) Financial Reporting Amendment Act 2006 Section 2(1) financial reporting standard inserted 1 July 2011 section 5(2) Financial Reporting Amendment Act 2011 Section 2(1) FMA inserted 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 2(1) infringement fee inserted 18 June 2007 section 4(2) Financial Reporting Amendment Act 2006 Section 2(1) infringement notice inserted 18 June 2007 section 4(2) Financial Reporting Amendment Act 2006 Section 2(1) infringement offence inserted 18 June 2007 section 4(2) Financial Reporting Amendment Act 2006 Section 2(1) licensed auditor inserted 1 July 2011 section 5(2) Financial Reporting Amendment Act 2011 Section 2(1) licensed insurer , on 1 February 2011 section 241(2) Insurance (Prudential Supervision) Act 2010 Section 2(1) local authority substituted 1 July 2003 section 262 Local Government Act 2002 Section 2(1) Minister substituted 1 October 1995 section 10(3) Department of Justice (Restructuring) Act 1995 Section 2(1) registered audit firm inserted 1 July 2011 section 5(2) Financial Reporting Amendment Act 2011 Section 2(1) reporting entity substituted 7 August 1996 section 2 Financial Reporting Amendment Act 1996 Section 2(1) specified standard inserted 1 July 2011 section 5(2) Financial Reporting Amendment Act 2011 Section 2(1) turnover substituted 21 January 2007 section 4(3) Financial Reporting Amendment Act 2006 Section 2(1) working day inserted 1 January 2014 section 8 Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Act 2013
3: Meaning of generally accepted accounting practice
For the purposes of this Act, financial statements and group financial statements comply with generally accepted accounting practice only if those statements comply with—
a: applicable financial reporting standards; and
b: in relation to matters for which no provision is made in applicable financial reporting standards and that are not subject to any applicable rule of law, accounting policies that—
i: are appropriate to the circumstances of the reporting entity; and
ii: have authoritative support within the accounting profession in New Zealand.
4: Meaning of issuer
1: In this Act, issuer
a: every person who has, whether before or after the commencement of this Act, allotted securities pursuant to—
i: an offer for which, or for which but for an exemption granted by the FMA or the Securities Commission under the Securities Act 1978 or an interest in a KiwiSaver scheme other than a restricted scheme
ii: an offer required to be contained in a prospectus required to be registered under the Companies Act 1955 whether or not the securities allotted are securities of the same type as the securities offered:
ab: every manager of a KiwiSaver scheme other than a restricted scheme (within the meaning of the KiwiSaver Act 2006 Securities Act 1978
b: every manager of a unit trust (within the meaning of section 2 Securities Act 1978
ba: every recipient of money from a conduit issuer (within the meaning of section 4A
c: every person who is a party to a listing agreement with a stock exchange in New Zealand and who has issued securities which are quoted on such an exchange:
d: every insurer to whom Part 10 Accident Compensation Act 2001
da: every licensed insurer (other than a Lloyd's underwriter within the meaning of the Insurance (Prudential Supervision) Act 2010 section 238(1)(b)
e: every operator within the meaning of the Retirement Villages Act 2003
2: Every registered bank (within the meaning of section 2(1) Securities Act 1978
3: In this section references to securities that have been issued or allotted are to be taken as references to securities that have not been cancelled, redeemed, forfeited, or in respect of which obligations owing under them have not been discharged.
4: Subsection (2) shall come into force on a date to be appointed by the Governor-General by Order in Council. Section 4(1) substituted 1 October 1997 section 3 Financial Reporting Amendment Act (No 2) 1996 Section 4(1)(a)(i) amended 1 May 2011 section 56 KiwiSaver Amendment Act 2011 Section 4(1)(a)(i) amended 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 4(1)(ab) inserted 1 May 2011 section 56 KiwiSaver Amendment Act 2011 Section 4(1)(ba) inserted 11 August 2007 section 5 Financial Reporting Amendment Act 2006 Section 4(1)(d) substituted 1 April 2002 section 337(1) Injury Prevention, Rehabilitation, and Compensation Act 2001 Section 4(1)(d) amended 3 March 2010 section 5(1)(b) Accident Compensation Amendment Act 2010 Section 4(1)(da) , on 1 February 2011 section 241(2) Insurance (Prudential Supervision) Act 2010 Section 4(1)(e) added 1 May 2007 section 109(1) Retirement Villages Act 2003
4A: Recipients of money from conduit issuers
1: In section 4 recipient of money from a conduit issuer
a: the person is related to another person (the conduit issuer
b: the conduit issuer raises an amount of money by the issue of securities offered to the public within the meaning of the Securities Act 1978
c: that money is raised as part of a scheme or arrangement under which 75% or more of that money is provided, directly or indirectly and whether by 1 transaction or a series of transactions, for the use of—
i: the person; or
ii: the person and 1 or more third persons that are related to the person; and
d: the money that is provided to the person under paragraph (c) is 10% or more of the money that is raised under paragraph (b); and
e: all or part of the money that is provided under paragraph (c) has not yet been repaid or returned to the conduit issuer.
2: In subsection (1),—
a: a person is related to another person if—
i: they are acting jointly or in concert; or
ii: either person acts, or is accustomed to act, in accordance with the wishes of the other person; or
iii: they are related companies within the meaning of section 2(3)
iv: either person is able, directly or indirectly, to exert a substantial degree of influence over the activities of the other; or
v: they are both, directly or indirectly, under the control of the same person; but
b: a director of a company or other body corporate is not related to that company or body corporate merely because he or she is a director of that company or body corporate. Section 4A inserted 18 June 2007 section 6 Financial Reporting Amendment Act 2006
4B: Exemption from being issuer under section 4(1)(ba)
1: The FMA
a: a person from being an issuer under section 4(1)(ba)
b: a class of persons from being issuers under section 4(1)(ba)
2: The exemption may be granted on any terms and conditions that the FMA
3: The FMA
4: An exemption is a disallowable instrument under the Legislation Act 2012 section 41
5: A class exemption must be published under section 6 class exemption
6: An exemption that is not a class exemption under subsection (5) must, as soon as practicable after being granted, be—
a: published on an Internet site maintained by or on behalf of the FMA; and
b: notified in the Gazette
c: made available in printed form for purchase on request by members of the public.
7: A notification in the Gazette Section 4B inserted 18 June 2007 section 6 Financial Reporting Amendment Act 2006 Section 4B(1) amended 5 August 2013 section 77(3) Legislation Act 2012 Section 4B(1) amended 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 4B(2) amended 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 4B(3) amended 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 4B(4) replaced 5 August 2013 section 77(3) Legislation Act 2012 Section 4B(5) inserted 5 August 2013 section 77(3) Legislation Act 2012 Section 4B(6) inserted 5 August 2013 section 77(3) Legislation Act 2012 Section 4B(7) inserted 5 August 2013 section 77(3) Legislation Act 2012
4C: Exemption may apply to accounting period before exemption is granted
An exemption under section 4B FMA Section 4C inserted 18 June 2007 section 6 Financial Reporting Amendment Act 2006 Section 4C amended 1 May 2011 section 82 Financial Markets Authority Act 2011
4D: FMA must notify reasons for exemption
The FMA's reasons for granting an exemption under section 4B Section 4D amended 5 August 2013 section 77(3) Legislation Act 2012
5: Persons ceasing to be issuers during accounting period
1: Where a person ceases to be an issuer during an accounting period, that person shall be deemed to continue to be an issuer in relation to that accounting period for the purposes of this Act.
2: However, this section does not apply to a person who ceases to be an issuer as a result of an exemption under section 4B Section 5(2) added 11 August 2007 section 7 Financial Reporting Amendment Act 2006
6: Certain persons not issuers
None of the following is an issuer for the purposes of this Act:
a: the Crown:
b: a local authority:
c: the Board of Trustees of the National Provident Fund continued in existence under section 12
d: the Reserve Bank of New Zealand continued in existence under section 5
e:
f: a company within the meaning of section 2(1) of the Companies Act 1955
g: a company within the meaning of section 2(1) Section 6(e) repealed 1 October 1997 section 4 Financial Reporting Amendment Act (No 2) 1996
6A: Meaning of exempt company
1: In this Act, exempt company
a: at least 2 of the following subparagraphs apply:
i: as at the balance date of the accounting period for which financial statements are required, the value of the total assets of the company (including intangible assets) reported in the statement of financial position did not exceed $1,000,000:
ii: in the accounting period for which financial statements are required, the turnover of the company did not exceed $2,000,000:
iii: as at the balance date of the accounting period for which financial statements are required, the company has 5 or fewer full-time equivalent employees; and
b: as at the balance date of the accounting period for which financial statements are required, the company—
i: was not a subsidiary of another body corporate or association of persons; and
ii: did not have any subsidiaries.
2: The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:
a: amending the maximum amount of assets that applies under subsection (1)(a)(i):
b: amending the maximum amount of turnover that applies under subsection (1)(a)(ii):
c: amending the maximum number of full-time equivalent employees that applies under subsection (1)(a)(iii).
3: In counting employees for the purposes of subsection (1), part-time employees must be taken into account as an appropriate fraction of a full-time equivalent. Section 6A inserted 22 November 2006 section 8 Financial Reporting Amendment Act 2006
7: Meaning of balance date
1: In this Act, the term balance date
2: Subject to subsections (3) and (4), an entity must have a balance date in each calendar year.
3: An entity need not have a balance date in the calendar year in which it is formed or incorporated if its first balance date is in the following calendar year and is not later than 15 months after the date of its formation or incorporation.
4: If an entity changes its balance date, it need not have a balance date in a calendar year if—
a: the period between any 2 balance dates does not exceed 15 months; and
b: the Registrar approves the change of balance date before it is made.
5: The Registrar may approve a change of balance date with or without conditions.
6: If an entity changes its balance date, the period between any 2 balance dates must not exceed 15 months.
7: The board of a reporting entity (not being an issuer) that is a company must ensure that, unless in the board's opinion there are good reasons against it, the balance date of each subsidiary of the company is the same as the balance date of the company.
8: The board of an issuer must ensure that the balance date of the issuer is the same as the balance date of its subsidiaries.
9: Subject to subsection (11), the Registrar may, by notice in writing and subject to such conditions as the Registrar thinks fit, exempt an issuer from subsection (8) either completely or in relation to a subsidiary or a class of subsidiaries.
10: The existence of the exemption must be stated in a note to the consolidated statement of financial position
11: If the balance date of a subsidiary of a reporting entity is not the same as that of the reporting entity, the balance date of the subsidiary for the purposes of any particular group financial statements must be that preceding the balance date of the reporting entity. Section 7(10) amended 1 October 1997 section 2 Financial Reporting Amendment Act 1997
8: Meaning of financial statements
1: In this Act, the term financial statements
a: a statement of financial position
b: in the case of—
i: an entity trading for profit, a statement of financial performance
ii: an entity not trading for profit, an income and expenditure statement for the entity in relation to the accounting period ending at the balance date; and
iii: an entity that is a building society within the meaning of the Building Societies Act 1965
c: if, in the case of a reporting entity, an applicable financial reporting standard requires a statement of cash flows for the reporting entity, a statement of cash flows for the reporting entity in relation to the accounting period ending on the balance date,— together with any notes or documents giving information relating to the statement of financial position
2: In this Act, the term financial statements
3: Where the Registrar notifies an overseas company that he or she is satisfied that the financial statements of the overseas company that comply with subsection (1) comply with subsection (2), those financial statements shall be taken to comply with subsection (2). Section 8(1) amended 1 October 1997 section 3(1) Financial Reporting Amendment Act 1997 Section 8(1)(b)(i) amended 1 October 1997 section 3(2) Financial Reporting Amendment Act 1997 Section 8(2) substituted 1 July 1994 Financial Reporting Amendment Act 1994
9: Meaning of group financial statements
1: In this Act, the term group financial statements
a: a consolidated statement of financial position
b: where a member of the group trades for profit, a consolidated statement of financial performance
c: where no member of the group trades for profit, a consolidated income and expenditure statement for the group in relation to the accounting period ending on that balance date; and
d: if an applicable financial reporting standard requires a consolidated statement of cash flows for the group, a consolidated statement of cash flows for the group in relation to the accounting period ending on that balance date,— together with any notes or documents giving information relating to the statement of financial position
2: In this Act, the term group financial statements
3: Where the Registrar notifies an overseas company that he or she is satisfied that the financial statements of the group that comply with subsection (1) comply with subsection (2), those financial statements shall be taken to comply with subsection (2). Section 9(1) amended 1 October 1997 section 4(a) Financial Reporting Amendment Act 1997 Section 9(1)(a) amended 1 October 1997 section 4(a) Financial Reporting Amendment Act 1997 Section 9(1)(b) amended 1 October 1997 section 4(b) Financial Reporting Amendment Act 1997 Section 9(2) substituted 1 July 1994 Financial Reporting Amendment Act 1994
9A: Application to certain issuers
1: For the purposes of this Act, a requirement on the directors of an issuer of securities in relation to a scheme within the meaning of section 2
a: if the liabilities of the issuer and the scheme are not limited to a particular group of assets (in this section referred to as a separate fund
b: if the liabilities of the issuer or the scheme are limited to a separate fund, financial statements in respect of both the scheme and that fund.
2: For the purposes of this Act, a requirement on the trustees of a superannuation scheme that is registered under the Superannuation Schemes Act 1989 , including a restricted KiwiSaver scheme (within the meaning of the KiwiSaver Act 2006
a: if the liabilities of the trustee and the scheme are not limited to a separate fund, financial statements in respect of the scheme; or
b: if the liabilities of the trustee or the scheme are limited to a separate fund, financial statements in respect of both the scheme and that fund.
3: Where the liability of an issuer that is a life insurance company to satisfy its obligations under any securities (as distinct from calculating the returns on the securities) is limited to a separate fund (whether the fund or the limitation is created by statute or by contract or otherwise), then, for the purposes of this Act, a requirement on the directors of the issuer to prepare and register financial statements shall be construed as including a requirement to prepare and register (in addition to financial statements in respect of the issuer itself), financial statements in respect of each such fund.
4: Subsection (5) applies if—
a: the financial statements of an operator of a retirement village (as those terms are defined in sections 5 6
i: more than 1 retirement village; or
ii: another trading activity that operates independently of the retirement village; and
b: either the statutory supervisor of the retirement village, or (if the operator is exempted under section 41
5: If this subsection applies, any requirement for an operator of a retirement village to prepare financial statements includes—
a: a requirement to prepare financial statements in respect of the retirement village as well as in respect of the operator; and
b: a requirement to lodge a copy of both statements, within 20 working days after the financial statements are required to be signed,—
i: with the statutory supervisor of the retirement village (if there is one); or
ii: if the operator is exempted from appointing a statutory supervisor, with the Registrar or with any person the Registrar appoints under a condition of that exemption. Section 9A inserted 1 October 1997 section 5 Financial Reporting Amendment Act (No 2) 1996 Section 9A(2) amended 1 May 2011 section 56 KiwiSaver Amendment Act 2011 Section 9A(4) added 1 May 2007 section 109(2) Retirement Villages Act 2003 Section 9A(5) added 1 May 2007 section 109(2) Retirement Villages Act 2003
2: Financial statements
Preparation of financial statements
10: Obligation to prepare financial statements
1: The directors of every reporting entity must ensure that, within 5 months after the balance date of the entity or, where the entity is required by any other Act to prepare financial statements or accounts within a shorter period after the end of its financial year or balance date, within that period, financial statements that comply with section 11
a: completed in relation to the entity and that balance date; and
b: dated and signed on behalf of the directors by 2 directors of the entity, or, if the entity has only 1 director, by that director.
2: The directors of every exempt company must ensure that within 5 months after the balance date of the company or, if all the members or shareholders of the company agree, within 9 months after the balance date of the company, financial statements that comply with section 12
a: completed in relation to the company and that balance date; and
b: dated and signed on behalf of the directors by 2 directors of the company, or, if the company has only 1 director, by that director. Section 10 substituted 1 July 1994 section 5 Financial Reporting Amendment Act 1994
10A: Non-active entities not required to prepare financial statements
1: The directors of an entity do not have to comply with section 10 19
a: was a non-active entity in respect of that accounting period; and
b: has, within the specified period, delivered to the Registrar a declaration, in the prescribed form, stating that it was a non-active entity in respect of that accounting period.
2: For the purposes of this section, an entity is a non-active entity
a: has not derived, or been deemed to have derived, any income; and
b: has no expenses; and
c: has not disposed of, or been deemed to have disposed of, any assets; and
d: has not been a party to, perpetuated, or continued with, any transactions that, during the period, give rise to obligations under the Income Tax Act 2004
3: In determining whether an entity is a non-active entity, no account may be taken of any—
a: statutory company filing fees or associated accounting or other costs; or
b: bank charges or other minimal administration costs totalling not more than $50 in the accounting period; or
c: interest earned on any bank account during the accounting period, to the extent that the total interest does not exceed the total of any charges or costs incurred by the entity to which paragraph (b) applies.
4: In this section, specified period section 10 Section 10A inserted 18 June 2007 section 9 Financial Reporting Amendment Act 2006
11: Content of financial statements of reporting entities
1: The financial statements of a reporting entity must comply with generally accepted accounting practice.
2: If, in complying with generally accepted accounting practice, the financial statements do not give a true and fair view of the matters to which they relate, the directors of the reporting entity must add such information and explanations as will give a true and fair view of those matters.
3: Where the Registrar of Companies notifies a reporting entity that is incorporated or constituted outside New Zealand that the Registrar is satisfied that—
a: the financial statements of the reporting entity comply with the requirements of the law in force in the country where the reporting entity is incorporated or constituted; and
b: those requirements are substantially the same as those of this Act,— those financial statements shall be taken to comply with this section and every applicable financial reporting standard. Section 11(3) substituted 1 July 1994 Financial Reporting Amendment Act 1994
12: Content of financial statements of exempt companies
1: The financial statements of an exempt company must either—
a: be in the form and contain the particulars and comply with the directions as to the preparation of those statements prescribed by the Governor-General by Order in Council; or
b: comply with section 11
2: For the purposes of subsection (1)(a), the Governor-General
a: the form of; and
b: the particulars to be contained in; and
c: directions to be complied with in the preparation of— financial statements of exempt companies.
3: Before making any recommendation for the purposes of subsection (2), the Minister shall do everything reasonably possible to advise such organisations as, in his or her opinion, have a professional interest in the terms of any order made under that subsection of the proposed terms of the order, and shall give those organisations a reasonable opportunity to make submissions to him or her.
4: Failure to comply with subsection (3) does not affect the validity of any order made under subsection (2).
5: Every order made under subsection (2) shall commence to apply in relation to accounting periods commencing on or after the date on which the order takes effect. Section 12(1) substituted 15 April 2004 section 4(1) Financial Reporting Amendment Act 2004 Section 12(2) amended 15 April 2004 section 4(2) Financial Reporting Amendment Act 2004 Section 12(2) amended 1 October 1995 section 10(3) Department of Justice (Restructuring) Act 1995
13: Obligation to prepare group financial statements
1: Subject to subsection (2), the directors of a reporting entity that has, on the balance date of the entity, 1 or more subsidiaries, must, in addition to complying with section 10 section 14
a: completed in relation to that group and that balance date; and
b: dated and signed on behalf of the directors by 2 directors of the entity, or, if the entity has only 1 director, by that director.
2: Group financial statements are not required in relation to a reporting entity that is a company if, on the balance date of the company, the company is not an issuer and the only shareholders of the company a reporting entity that is
a: a body corporate that is incorporated in New Zealand or a nominee of such a body corporate; or
b: a body corporate that is incorporated in New Zealand or a nominee of such a body corporate and a subsidiary of such a body corporate or a nominee of such a subsidiary. Section 13(2) amended 22 November 2006 section 10 Financial Reporting Amendment Act 2006 Section 13(2) amended 3 May 2001 section 3 Financial Reporting Amendment Act 2001
14: Content of group financial statements
1: The financial statements of a group must comply with generally accepted accounting practice.
2: If, in complying with generally accepted accounting practice, the group financial statements do not give a true and fair view of the matters to which they relate, the directors of the reporting entity must add such information and explanations as will give a true and fair view of those matters.
3: In any case where a subsidiary became a subsidiary of a reporting entity during the accounting period to which the group financial statements relate, the consolidated statement of financial performance
4: Subject to subsection (3), where the balance date of a subsidiary of a reporting entity is not the same as that of the reporting entity, the group financial statements must—
a: if the balance date of the subsidiary does not precede that of the reporting entity by more than 3 months, incorporate the financial statements of the subsidiary for the accounting period ending on that date, or incorporate interim financial statements of the subsidiary completed in respect of a period that is the same as the accounting period of the reporting entity; or
b: in any other case, incorporate interim financial statements of the subsidiary completed in respect of a period that is the same as the accounting period of the reporting entity.
5: Where the Registrar of Companies notifies a reporting entity that is incorporated or constituted outside New Zealand that the Registrar is satisfied that—
a: the group financial statements of the group that comprises the reporting entity and its subsidiaries comply with the law in force in the country where the reporting entity is incorporated or constituted; and
b: those requirements are substantially the same as those of this Act,— those financial statements shall be taken to comply with this section and every applicable financial reporting standard.
6: Subject to subsection (3), group financial statements must, except where otherwise required by an applicable financial reporting standard, incorporate the financial statements of every subsidiary of the reporting entity. Section 14(3) amended 1 October 1997 section 5 Financial Reporting Amendment Act 1997 Section 14(5) substituted 1 July 1994 Financial Reporting Amendment Act 1994
15: Financial statements of issuers and group financial statements of issuers to be audited
1: The directors of an issuer must ensure that the financial statements of the issuer and, if the issuer is required to complete group financial statements, the group financial statements are audited.
2: The financial statements and any group financial statements must be audited—
a: by a licensed auditor; or
b: by a registered audit firm; or
c: if the issuer is a public entity under the Public Audit Act 2001
3: This section shall not apply in respect of a superannuation scheme that is registered under the Superannuation Schemes Act 1989 section 13 Section 15(2) replaced 1 July 2012 section 6(1) Financial Reporting Amendment Act 2011 Section 15(3) added 1 October 1997 section 6 Financial Reporting Amendment Act (No 2) 1996
16: Auditor's report on reporting entities
1: Where, pursuant to section 15 Companies Act 1955 Companies Act 1993
a: the work done by the auditor; and
b: the scope and limitations of the audit; and
c: the existence of any relationship (other than that of auditor) which the auditor has with, or any interests which the auditor has in, the reporting entity or any of its subsidiaries; and
d: whether the auditor has obtained all information and explanations that he or she has required; and
e: whether, in the auditor's opinion, as far as appears from an examination of them, proper accounting records have been kept by the reporting entity; and
f: whether, in the auditor's opinion, the financial statements and any group financial statements comply with generally accepted accounting practice, and if they do not, the respects in which they fail to comply; and
g: whether, in the auditor's opinion and having regard to any information or explanations that may have been added by the reporting entity pursuant to section 11(2) section 14(2)
1A: Section 79
2: Where the auditor's report indicates that the requirements of this Act have not been complied with, the auditor must, within 7 working days after signing the report, send a copy of the report and a copy of the financial statements and any group financial statements to which it relates, to the Registrar who must, in turn, forthwith send copies of the report and statements to the Board and, if the reporting entity or group to which the report and statements relate is an issuer, to the FMA Section 16(1A) , on 1 February 2011 section 241(2) Insurance (Prudential Supervision) Act 2010 Section 16(2) substituted 28 July 1997 section 3 Financial Reporting Amendment Act (No 2) 1997 Section 16(2) amended 1 May 2011 section 82 Financial Markets Authority Act 2011
17: Auditor's report on exempt companies
Where, pursuant to the Companies Act 1955 Companies Act 1993
a: the work done by the auditor; and
b: the scope and limitations of the audit; and
c: the existence of any relationship (other than that of auditor) which the auditor has with, or any interests which the auditor has in, the exempt company; and
d: whether the auditor has obtained all information and explanations that he or she has required; and
e: whether, in the auditor's opinion, as far as appears from an examination of them, proper accounting records have been kept by the exempt company; and
f: whether , in the auditor's opinion, section 12 Section 17(f) amended 28 July 1997 section 4 Financial Reporting Amendment Act (No 2) 1997 Registration of financial statements by issuers
18: Registration of financial statements by issuers
1: The directors of an issuer must ensure that, within 20 working days after the financial statements of the issuer and any group financial statements are required to be signed, copies of those statements together with a copy of the auditor's report on those statements are delivered to the Registrar for registration.
1A: Any financial statements to which subsection (1) applies and that are required for the purposes of this Act may also contain or be accompanied by financial statements and any auditor's report on those statements, that are required for the purposes of a prospectus under the Securities Act 1978
2: The issuer must, at the same time, pay to the Registrar the prescribed registration fee.
3: Any person may, on payment of the prescribed fee (if any), inspect the copies of an issuer's financial statements and auditor's report on those statements delivered to the Registrar under subsection (1). Section 18(1A) inserted 1 October 1997 section 7 Financial Reporting Amendment Act (No 2) 1996 Section 18(3) substituted 3 May 2001 section 4 Financial Reporting Amendment Act 2001 Registration of financial statements by overseas companies
19: Overseas companies and certain other companies to register financial statements
1: This section applies to—
a: any company, other than an issuer, that is an overseas company; or
b: any company, other than an issuer,—
i: that is large; and
ii: in which shares that in aggregate carry the right to exercise or control the exercise of 25% or more of the voting power at a meeting of the company are held by—
A: a subsidiary of a company or body corporate incorporated outside New Zealand; or
B: a company or body corporate incorporated outside New Zealand; or
C: a person not ordinarily resident in New Zealand; or
c: any company, other than an issuer, that is a subsidiary of a company or body corporate incorporated outside New Zealand.
2: However, this section does not apply to a company ( company A
a: company A is a subsidiary of a company that is incorporated in New Zealand ( company B
b: financial statements in relation to company B that comply with section 11 section 10
c: group financial statements in relation to a group comprising company B, company A, and all other subsidiaries of company B that comply with section 14 section 13
d: a copy of the financial statements referred to in paragraph (b) and a copy of the group financial statements referred to in paragraph (c), together with the auditor's report on those statements, are delivered to the Registrar for registration.
3: The directors of every company to which this section applies must—
a: ensure that, within 20 working days after the financial statements of the company and any group financial statements in relation to a group comprising that company and its subsidiaries are required to be signed, copies of those statements, together with a copy of the auditor's report on those statements, are delivered to the Registrar for registration; and
b: ensure that the company pays to the Registrar the prescribed registration fee at the same time. Section 19 substituted 21 January 2007 section 11 Financial Reporting Amendment Act 2006
19A: Interpretation for section 19
1: For the purposes of section 19
a: a person is ordinarily resident in New Zealand if that person—
i: is domiciled in New Zealand; or
ii: is living in New Zealand and the place where that person usually lives is, and has been for the immediately preceding 12 months, in New Zealand, whether or not that person has on occasions been away from New Zealand during that period:
b: a company is large if at least 2 of the following subparagraphs apply:
i: as at the balance date of the accounting period for which financial statements are required, the total assets (including intangible assets) of the company and its subsidiaries (if any) reported in the statement of financial position or consolidated statement of financial position (as the case may be) exceeds $10,000,000:
ii: in the accounting period for which financial statements are required, the total turnover of the company and its subsidiaries (if any) exceeds $20,000,000:
iii: as at the balance date of the accounting period for which financial statements are required, the company and its subsidiaries (if any) have 50 or more full-time equivalent employees:
c: auditor's report section 199
d: a subsidiary does not include any company or body corporate or association of persons that is classified as a subsidiary in any applicable financial reporting standard.
2: The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:
a: amending the amount of assets that must be exceeded under subsection (1)(b)(i):
b: amending the amount of turnover that must be exceeded under subsection (1)(b)(ii):
c: amending the minimum number of full-time equivalent employees that applies under subsection (1)(b)(iii).
3: In counting employees for the purposes of subsection (1), part-time employees must be taken into account as an appropriate fraction of a full-time equivalent. Section 19A inserted 21 January 2007 section 11 Financial Reporting Amendment Act 2006
20: Fees
The Governor-General may from time to time, by Order in Council,—
a: prescribe the fees payable to the Registrar under section 18(2) or section 18(3) section 19(3)
b: prescribe the amounts payable to the Registrar by way of penalty for failure to deliver financial statements or group financial statements and the auditor's report on those statements within the time prescribed by section 18(1) section 19(3) Section 20(a) amended 3 May 2001 section 5 Financial Reporting Amendment Act 2001 Section 20(b) amended 21 January 2007 section 12 Financial Reporting Amendment Act 2006
21: Application of this Part to accounting periods ending before person becomes an issuer
Nothing in this Part requires the directors of an issuer, not being a company, to ensure the completion of financial statements and any group financial statements and the registration of those financial statements in relation to an accounting period that ended before the accounting period in which that person became an issuer.
3: External Reporting Board
Part 3 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
22: Continuation of External Reporting Board
1: There continues to be an organisation to be called the External Reporting Board.
2: The External Reporting Board is a Crown entity for the purposes of section 7
3: The Crown Entities Act 2004
4: The External Reporting Board is the same body as the Accounting Standards Review Board established under section 22 as in force immediately before its substitution by this section.
5: Unless the context otherwise requires, every reference to the Accounting Standards Review Board in any enactment, agreement, deed, instrument, application, notice, or other document in force immediately before the commencement of this section must, on and after that commencement, be read with all necessary modifications as a reference to the External Reporting Board. Section 22 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
23: Membership of Board
1: The Board consists of no fewer than 4 and not more than 9 members.
2: The Minister must not recommend a person for appointment as a member of the Board unless, in the opinion of the Minister, that person is qualified for appointment by reason of his or her knowledge of, or experience in, business, accounting, auditing, finance, economics, or law.
3: Subsection (2) does not limit section 29
4: Members of the External Reporting Board are the board for the purposes of the Crown Entities Act 2004 Section 23 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
24: Functions of Board
1: The Board has the following functions:
a: to prepare and, if it thinks fit, issue financial reporting standards for the purposes of—
i: this Act; or
ii: the Crown Entities Act 2004
iii: the Public Finance Act 1989
iv: the Local Government Act 2002
v: any Act that requires a person to comply with this Act as if that person were a reporting entity:
b: to prepare and, if it thinks fit, issue auditing and assurance standards for—
i: the purposes of this Act; or
ii: the purposes of the Auditor Regulation Act 2011
iii: the purposes of any enactment that requires a person to comply with those standards; or
iv: the purposes of any rules or codes of ethics of an association of accountants that require its members to comply with those standards; or
v: any other purpose approved by the Minister by notice in writing to the Board:
c: to develop and implement strategies for the issue of specified standards in order to provide a framework for the Board's overall direction in the setting of standards (including developing and implementing a strategy for tiers of financial reporting in accordance with sections 34 to 34D
d: to give directions or guidance as to the accounting policies that have authoritative support within the accounting profession in New Zealand:
e: to prepare and, if it thinks fit, issue amendments to any specified standards:
f: to liaise with international or national organisations that exercise functions that correspond with, or are similar to, those conferred on the Board.
2: For the avoidance of doubt, the function of the Board referred to in subsection (1)(a) includes the function of preparing and, if the Board thinks fit, issuing financial reporting standards that relate to prospective, summary, or interim financial information. Section 24 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
25: Board must act independently
Except as expressly provided otherwise in this or another Act, the Board must act independently in performing its statutory functions and duties, and exercising its statutory powers, under—
a: this Act; and
b: any other Act that expressly provides for the functions, powers, or duties of the Board (other than the Crown Entities Act 2004 Section 25 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
26: Consultation
1: The Board must not issue a specified standard, or an amendment to a specified standard, unless the Board has taken reasonable steps to consult with persons or organisations or representatives of persons or organisations who, in the opinion of the Board, would be affected by the issue of the standard or the amendment.
2: The Board must not issue a specified standard, or an amendment to a specified standard, that is likely to require the disclosure of personal information unless the Board has consulted the Privacy Commissioner.
3: Any failure to comply with subsection (1) or (2) does not affect the validity of the specified standard or the amendment.
4: In subsection (2),— personal information section 2 Privacy Commissioner section 2
5: This section does not limit section 16 17 Section 26 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
27: Financial reporting standards
1: Financial reporting standards may be expressed to apply in relation to—
a: all reporting entities or groups; or
b: specified reporting entities or groups; or
c: the Crown; or
d: all departments or offices of Parliament or Crown entities; or
e: specified departments or offices of Parliament or Crown entities; or
f: all local authorities; or
g: specified local authorities; or
h: accounting periods or interim accounting periods.
2: Financial reporting standards may—
a: have general or specific application:
b: differ according to differences in time or circumstance.
3: A financial reporting standard may classify a company as a subsidiary of another company where, although the company is not a subsidiary of that other company for the purposes of section 5
4: In subsection (3), company
5: The Board may determine that—
a: a financial reporting standard that has not been issued so as to apply to a particular person (including a department or office of Parliament) or category of persons will apply to that person or category of persons in relation to the accounting periods or interim accounting periods that the Board may determine; or
b: a financial reporting standard that applies to a particular person (including a department or office of Parliament) or category of persons will cease to apply to that person or category of persons in relation to the accounting periods or interim accounting periods that the Board may determine. Section 27 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
28: Miscellaneous matters relating to application of financial reporting standards
1: A financial reporting standard, an amendment to a financial reporting standard, or a determination under section 27(5) Gazette
2: However, a financial reporting standard, an amendment to a financial reporting standard, or a determination under section 27(5) Gazette
a: the Board is satisfied that it is desirable to allow this subsection to apply because bringing the financial reporting standard, amendment, or determination into effect earlier than is provided in subsection (1) is necessary or desirable in order for 1 or more reporting entities or the directors of those entities to comply with the financial reporting or accounting standards issued or adopted by an international organisation (for example, the International Accounting Standards Board); and
b: the notice under section 31
c: the directors of the reporting entity elect in writing that this subsection should apply in respect of the financial reporting standard, amendment, or determination.
3: A financial reporting standard, an amendment to a financial reporting standard, or a determination made under section 27(5)
a: may be accounting periods or interim accounting periods that have commenced or that commence before the date on which the financial reporting standard, amendment, or determination takes effect; but
b: must not be accounting periods or interim accounting periods that have ended or that end before the financial reporting standard, amendment, or determination takes effect.
4: However, if a financial reporting standard specifies that an election may be made under this subsection, any of the following may elect in writing that the standard will apply to a particular accounting period or interim accounting period that it would not otherwise apply to:
a: the directors of a reporting entity:
b: the Minister of Finance and the Secretary to the Treasury, in relation to financial statements for the Crown required to be prepared under the Public Finance Act 1989
c: the chief executive of a department:
d: the chief executive of an office of Parliament:
e: the chairperson and the chief executive of a Crown entity or, if no chairperson exists, the chief executive:
f: the chief executive of a local authority.
5: If an election is made under subsection (4), the financial reporting standard will apply accordingly to the accounting period or interim accounting period in respect of the relevant reporting entity, the Crown, the department, the office of Parliament, the Crown entity, or the local authority (as the case may be). Section 28 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
29: Auditing and assurance standards
1: Auditing and assurance standards may—
a: have general or specific application:
b: differ according to differences in time or circumstance.
2: Auditing and assurance standards may (without limitation) include professional and ethical standards that govern the professional conduct of persons who are appointed or engaged to carry out audits or other assurance engagements.
3: An auditing and assurance standard or an amendment to an auditing and assurance standard takes effect on the 28th day after the date of the notification of the issue or amendment in the Gazette
4: An auditing and assurance standard or an amendment to an auditing and assurance standard commences to apply in relation to the accounting periods or interim accounting periods that the Board specifies in the standard or amendment, which periods—
a: may be accounting periods or interim accounting periods that have commenced or that commence before the date on which the auditing and assurance standard or amendment takes effect; but
b: must not be accounting periods or interim accounting periods that have ended or that end before the auditing and assurance standard or amendment takes effect. Section 29 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
30: Revocation of standard
1: The Board may revoke a specified standard.
2: Any revocation takes effect on the 28th day after the date of the notification of the revocation in the Gazette
3: The revocation of a specified standard applies in relation to the accounting periods or interim accounting periods that the Board specifies, which periods—
a: may be accounting periods or interim accounting periods that have commenced or that commence before the date on which the revocation takes effect; but
b: must not be accounting periods or interim accounting periods that have ended or that end before the revocation takes effect.
4: However, if the revocation of a financial reporting standard specifies that an election may be made under this subsection, any of the following may elect in writing that the revocation will apply to a particular accounting period or interim accounting period that it would not otherwise apply to:
a: the directors of a reporting entity:
b: the Minister of Finance and the Secretary to the Treasury, in relation to financial statements for the Crown required to be prepared under the Public Finance Act 1989
c: the chief executive of a department:
d: the chief executive of an office of Parliament:
e: the chairperson and the chief executive of a Crown entity or, if no chairperson exists, the chief executive:
f: the chief executive of a local authority.
5: If an election is made under subsection (4), the revocation of the financial reporting standard will apply accordingly to the accounting period or interim accounting period in respect of the relevant reporting entity, the Crown, the department, the office of Parliament, the Crown entity, or the local authority (as the case may be). Section 30 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
31: Public notice
1: The Board must give notice of—
a: the issue of a specified standard; and
b: the amendment of a specified standard; and
c: any determination made under section 27(5)
d: the revocation of a specified standard or of any amendment to any specified standard.
2: A notice under this section—
a: must be given in the Gazette
b: may be given in any other publications that the Board considers appropriate for that purpose.
3: A notice under this section must—
a: identify the specified standard or the amendment to the specified standard (as the case may be) but need not incorporate it in the notice:
b: identify the financial reporting standard to which the determination relates, but need not incorporate it in the notice:
c: identify the specified standard revoked or the amendment to the standard revoked (as the case may be) but need not incorporate it in the notice.
4: The Board must—
a: publish specified standards that are in effect on an Internet site maintained by or on behalf of the Board; and
b: ensure that copies of those specified standards are available for purchase by members of the public. Section 31 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
32: Disallowance of instruments and determinations by House of Representatives
1: The following instruments and determinations of the Board are disallowable instruments for the purposes of the Legislation Act 2012
a: any specified standard:
b: any amendment to a specified standard:
c: any revocation of a specified standard:
d: any determination made under section 27(5)
2: The instruments and determinations referred to in subsection (1) must be presented to the House of Representatives in accordance with section 41
3: The instruments and determinations referred to in subsection (1) are not legislative instruments for the purposes of the Legislation Act 2012 Section 32 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011 Section 32(1) amended 5 August 2013 section 77(3) Legislation Act 2012 Section 32(2) amended 5 August 2013 section 77(3) Legislation Act 2012 Section 32(3) amended 5 August 2013 section 77(3) Legislation Act 2012
33: Certificates of Board
A certificate purporting to be signed by any member of the Board as to any of the following is, in the absence of evidence to the contrary, sufficient evidence of the matters stated in the certificate:
a: the making of a determination issuing a specified standard or any amendment to a specified standard; or
b: the making of a determination under section 27(5)
c: the making of a determination revoking a specified standard; or
d: the accounting period or interim accounting period in relation to which a specified standard will commence to apply; or
e: the accounting period or interim accounting period in relation to which a specified standard ceases to apply; or
f: the accounting period or interim accounting period in relation to which a specified standard was in force. Section 33 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
34: Tiers of financial reporting for different classes of reporting entities and other entities
1: The purpose of sections 34A to 34D
2: In this section and in sections 34A 34B relevant entities
a: means reporting entities, groups, the Crown, departments, offices of Parliament, Crown entities, and local authorities; and
b: includes any other entities that are required by any Act to prepare financial statements in accordance with generally accepted accounting practice. Section 34 substituted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
34A: Board must develop and implement strategy for tiers of financial reporting
1: The Board must, within 9 months after the commencement of this section, prepare and submit to the Minister for approval, a draft strategy for establishing different tiers of financial reporting in respect of different classes of relevant entities.
2: The Board must, after the strategy is approved by the Minister, take reasonable steps to implement the strategy. Section 34A inserted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
34B: Process for preparing strategy for tiers of financial reporting
1: In preparing the draft strategy under section 34A
a: the purpose referred to in section 34(1)
b: the advantages and disadvantages of placing different classes of relevant entities within different tiers of financial reporting.
2: The draft strategy under section 34A
a: specify the qualifying criteria for each tier of financial reporting; and
b: describe the financial reporting requirements that will apply for each tier of financial reporting; and
c: specify the Board's reasons (including why the strategy is appropriate); and
d: include any other prescribed matters.
3: The description under subsection (2)(b) may refer to—
a: a set of standards (for example, International Financial Reporting Standards and International Public Sector Accounting Standards):
b: specific standards:
c: accounting policies, principles, concepts, or methods (for example, the principles of accrual accounting):
d: any combination of the matters in paragraphs (a) to (c).
4: The Board must, in preparing the draft strategy, consult the persons or organisations or representatives of persons or organisations who, in the opinion of the Board, would be affected by the strategy.
5: Any failure to comply with subsection (4) does not affect the validity of the strategy. Section 34B inserted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
34C: Minister may approve strategy
1: The Minister may, after receiving the draft strategy from the Board under section 34A
2: The Minister may decline to approve a draft strategy only if, in his or her opinion,—
a: the Board has not had sufficient regard to the matters specified in section 34B(1)
b: the Board has not adequately consulted on the strategy under section 34B(4)
c: the draft strategy is inconsistent with the purposes of this Act.
3: If the Minister declines to approve a draft strategy, he or she may give a direction to the Board to review the strategy and resubmit a draft strategy to the Minister for approval (and the Board must comply with that direction).
4: The Minister's direction under subsection (3) may specify the date by which a draft strategy must be resubmitted (which may be after the 9-month period referred to in section 34A Section 34C inserted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
34D: Board may vary or replace strategy for tiers of financial reporting
1: The Board may—
a: vary a strategy that has been approved under section 34C
b: revoke a strategy that has been approved under section 34C
2: Sections 34A(2) 34B 34C
3: However, the Board is not required to comply with section 34B(4) Section 34D inserted 1 July 2011 section 7 Financial Reporting Amendment Act 2011
35: Amendment to Official Information Act 1982
Section 35 repealed 25 January 2005 section 200 Crown Entities Act 2004
4: Miscellaneous
35A: FMA may grant exemptions to directors of issuers that are incorporated or constituted outside New Zealand
1: The FMA may exempt any directors of an issuer that is incorporated or constituted outside New Zealand, or any directors of a class of those issuers, from compliance with any provision of sections 8 to 11 13 to 16 18 36 36A 38
2: The FMA must not grant an exemption under this section unless it is satisfied that—
a: the exemption would not cause significant detriment to subscribers for the securities of the issuer who are members of the public in New Zealand, having regard to the financial reporting requirements that must be complied with in relation to the issuer under the law in force in the country where the issuer is incorporated or constituted; and
b: the extent of the exemption is not broader than is reasonably necessary to address the matters that gave rise to the exemption.
3: The exemption may be granted on any terms and conditions that the FMA thinks fit.
4: The FMA may vary or revoke an exemption in the same way as an exemption may be granted under this section.
5: Section 35A substituted 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 35A(5) repealed 14 September 2013 section 4(3) Financial Markets (Repeals and Amendments) Act 2013
35AB: Transitional provision for exemptions granted by Securities Commission
Every exemption granted under section 35A
a: continues in force as if it were granted under section 35A
b: may be amended or revoked as if granted under that section. Section 35AB inserted 1 May 2011 section 82 Financial Markets Authority Act 2011
35AC: Status and publication of exemptions under section 35A
1: An exemption granted under section 35A
a: is a disallowable instrument for the purposes of the Legislation Act 2012
b: must be presented to the House of Representatives under section 41
2: A class exemption (but not any other exemption granted under section 35A Legislation Act 2012
3: An exemption granted under section 35A
a: published on an Internet site maintained by or on behalf of the FMA; and
b: notified in the Gazette
c: made available in printed form for purchase on request by members of the public.
4: A notification in the Gazette
5: The FMA's reasons for granting an exemption under section 35A
6: In this section, class exemption Section 35AC inserted 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 35AC(1) replaced 5 August 2013 section 77(3) Legislation Act 2012 Section 35AC(2) replaced 5 August 2013 section 77(3) Legislation Act 2012
35B: Registrar of Companies may grant exemptions to directors of overseas companies
1: The Registrar of Companies may, by notice in the Gazette sections 8 to 11 13 14 19 36 36A 39
2: The Registrar of Companies must not grant an exemption under this section unless he or she is satisfied that—
a: compliance with the relevant provision would require the directors of the overseas company to comply with requirements that are unduly onerous or burdensome; and
b: the extent of the exemption is not broader than what is reasonably necessary to address the matters that gave rise to the exemption.
3: The exemption may be granted on any terms and conditions that the Registrar of Companies thinks fit.
4: The Registrar of Companies may give notice of the exemption in any publications he or she thinks fit (in addition to notifying the exemption in the Gazette
5: The Registrar of Companies may vary or revoke an exemption in the same way as an exemption may be granted under this section.
6: A notice published in the Gazette Legislation Act 2012 section 41
7: The Registrar of Companies' reasons for granting an exemption (including why the exemption is appropriate) must be notified in the Gazette Section 35B inserted 18 June 2007 section 18 Financial Reporting Amendment Act 2006 Section 35B(6) replaced 5 August 2013 section 77(3) Legislation Act 2012 Section 35B(7) added 1 May 2011 section 82 Financial Markets Authority Act 2011
35C: Consultation
1: In deciding whether or not to grant, amend, or revoke an exemption under section 35A 35B
a: may consult with any persons or organisations that the FMA or Registrar thinks fit; but
b: must consult with—
i: the Commissioner of Inland Revenue if the exemption is under section 35B section 10
ii: the Reserve Bank of New Zealand if the exemption concerns a registered bank (within the meaning of section 2(1)
2: This section does not limit section 16 17 Section 35C inserted 18 June 2007 section 18 Financial Reporting Amendment Act 2006 Section 35C(1) substituted 1 May 2011 section 82 Financial Markets Authority Act 2011
35D: Exemption may apply to accounting period before exemption is granted
An exemption under section 35A 35B FMA
a: in the case of copies of financial statements or group financial statements for that period that are required to be delivered for registration under section 18 19
b: in any other case, the exemption is granted before the financial statements or group financial statements for that period are required to be completed. Section 35D inserted 18 June 2007 section 18 Financial Reporting Amendment Act 2006 Section 35D amended 1 May 2011 section 82 Financial Markets Authority Act 2011
35E: Reasons for exemption must be notified
Section 35E repealed 1 May 2011 section 82 Financial Markets Authority Act 2011
36: Offences by directors of reporting entities
1: Where—
a: financial statements in relation to a reporting entity are not completed and signed within the time specified in section 10
b: group financial statements in relation to a group comprising a reporting entity and its subsidiaries are not completed and signed within the time specified in section 13 every director of the reporting entity commits an offence and is liable on
2: Where the financial statements of a reporting entity or group financial statements in relation to a group comprising a reporting entity and its subsidiaries fail to comply with an applicable financial reporting standard, every director of the reporting entity commits an offence and is liable on Section 36(1) amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 36(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
36A: Content of statements that contain prospective, summary, or interim financial information
1: Any statement prepared by, or on behalf of, a reporting entity that contains prospective, summary, or interim financial information for the reporting entity must comply with any applicable financial reporting standard.
2: Any statement prepared by, or on behalf of, a group comprising a reporting entity and its subsidiaries that contains prospective, summary, or interim financial information for the group must comply with any applicable financial reporting standard.
3: Every director of a reporting entity commits an offence and is liable on conviction
a: any statement prepared by, or on behalf of, the reporting entity that contains prospective, summary, or interim financial information for the reporting entity does not comply with this section; or
b: any statement prepared by, or on behalf of, a group comprising the reporting entity and its subsidiaries that contains prospective, summary, or interim financial information for the group does not comply with this section.
4: This section does not apply to the extent that it is inconsistent with, or modified by, the provisions of another enactment. Section 36A inserted 15 April 2004 section 6 Financial Reporting Amendment Act 2004 Section 36A(3) amended 1 July 2013 section 413 Criminal Procedure Act 2011
37: Offences by directors of exempt companies
Where—
a: financial statements in relation to an exempt company are not completed and signed within the time specified in section 10
b: financial statements in relation to an exempt company do not comply with section 12 every director of the exempt company commits an offence and is liable on Section 37 amended 1 July 2013 section 413 Criminal Procedure Act 2011
38: Offences by directors of issuers
Where—
a: the financial statements of an issuer and any group financial statements in relation to a group comprising an issuer and its subsidiaries are not audited in accordance with section 15
b: a copy of the financial statements of an issuer or group financial statements together with the auditor's report on those statements are not delivered to the Registrar in accordance with section 18(1)
c: every director of the issuer commits an offence and is liable on Section 38 amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 38(b) amended 3 May 2001 section 8(a) Financial Reporting Amendment Act 2001 Section 38(c) repealed 3 May 2001 section 8(b) Financial Reporting Amendment Act 2001
39: Offences by directors of overseas companies and
other companies to which section 19 applies Where a copy of the financial statements of a company to which section 19 subsection (3) of that section Section 39 heading amended 21 January 2007 section 19(1) Financial Reporting Amendment Act 2006 Section 39 amended 1 July 2013 section 413 Criminal Procedure Act 2011 Section 39 amended 21 January 2007 section 19(2) Financial Reporting Amendment Act 2006
40: Defences
It is a defence to a director of an entity charged with an offence under any of sections 36 to 39
a: the directors of the entity took all reasonable and proper steps to ensure that the applicable requirement of this Act would be complied with; or
b: he or she took all reasonable and proper steps to ensure that the directors of the entity complied with the applicable requirement; or
c: in the circumstances he or she could not reasonably have been expected to take steps to ensure that the directors of the entity complied with the applicable requirement.
41: False statements
1: Every person who, with respect to a document required by this Act,—
a: makes, or authorises the making of, a statement in the document that is false or misleading in a material particular knowing the statement to be false or misleading; or
b: omits, or authorises the omission, from the document of any matter knowing that the omission makes the document false or misleading in a material particular— commits an offence and is liable on conviction
2: For the purposes of this section, a person who voted in favour of the making of a statement at a meeting of directors or members or shareholders of an entity is deemed to have authorised the making of the statement. Section 41(1) amended 1 July 2013 section 413 Criminal Procedure Act 2011
41A: Infringement offences
1: If a person is alleged to have committed an infringement offence, that person may either—
a: be proceeded against by filing a charging document under section 14
b: be served with an infringement notice as provided in section 41B
2: Despite section 21 Criminal Procedure Act 2011 Section 41A inserted 18 June 2007 section 20 Financial Reporting Amendment Act 2006 Section 41A(1)(a) replaced 1 July 2013 section 413 Criminal Procedure Act 2011 Section 41A(2) replaced 1 July 2013 section 413 Criminal Procedure Act 2011
41B: Infringement notices
1: The Registrar may issue an infringement notice to a person if the Registrar believes on reasonable grounds that the person is committing, or has committed, an infringement offence.
2: The Registrar may revoke an infringement notice before the infringement fee is paid, or an order for payment of a fine is made or deemed to be made by a court under section 21
3: An infringement notice is revoked by giving written notice to the person to whom it was issued that the notice is revoked. Section 41B inserted 18 June 2007 section 20 Financial Reporting Amendment Act 2006
41C: Procedural requirements for infringement notices
1: An infringement notice may be served on a person—
a: by delivering it, or a copy of it, personally to the person who appears to have committed the infringement offence; or
b: by sending it, or a copy of it, by post, addressed to the person at the person's last known place of residence or business.
2: An
3: An infringement notice must be in the prescribed form and must contain—
a: details of the alleged infringement offence that are sufficient to fairly inform a person of the time, place, and nature of the alleged infringement offence; and
b: the amount of the infringement fee; and
c: an address at which the infringement fee may be paid; and
d: the time within which the infringement fee must be paid; and
e: a summary of the provisions of section 21(10)
f: a statement that the person served with the notice has a right to request a hearing; and
g: a statement of what will happen if the person served with the notice does not pay the fee and does not request a hearing; and
h: any other prescribed matters.
4: If an infringement notice has been issued, proceedings in respect of the infringement offence to which the notice relates may be commenced in accordance with section 21
a: reminder notices may be prescribed under regulations made under this Act; and
b: in all other respects, section 21
5: Reminder notices must contain the prescribed information. Section 41C inserted 18 June 2007 section 20 Financial Reporting Amendment Act 2006 Section 41C(2) amended 1 July 2013 section 413 Criminal Procedure Act 2011
41D: Payment of infringement fee
The Registrar must pay all infringement fees received into a Crown Bank Account. Section 41D inserted 18 June 2007 section 20 Financial Reporting Amendment Act 2006
42: Time for filing charging document for offence against section 37
1: Despite anything to the contrary in section 25 section 37
2: Nothing in subsection (1) affects the application of section 25 Section 42 replaced 1 July 2013 section 413 Criminal Procedure Act 2011
42A: Privacy Act 1993
The disclosure of personal information (as defined in section 2 principle 10 principle 11 or issued Financial Reporting Amendment Act 2001 Section 42A inserted 3 May 2001 section 9 Financial Reporting Amendment Act 2001 Section 42A amended 1 July 2011 section 8 Financial Reporting Amendment Act 2011
42B: Regulations
1: The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:
a: prescribing fees and charges that—
i: the FMA FMA section 4B 35A
ii:
iii: the Registrar of Companies may require to be paid to him or her in connection with an application to him or her to grant or amend an exemption under section 35B
b: prescribing the amounts of those fees or charges or the method by which they are to be calculated:
c: prescribing forms for the purposes of section 10A
d: prescribing the information that must be included in infringement notices or reminder notices:
e: prescribing matters for the purposes of section 34B(2)(d)
f: providing for any other matters contemplated by this Act, necessary for its administration, or necessary for giving it full effect.
2: The amounts payable under regulations made under this section are recoverable by the FMA FMA Section 42B inserted 22 November 2006 section 21 Financial Reporting Amendment Act 2006 Section 42B(1)(a)(i) amended 1 May 2011 section 82 Financial Markets Authority Act 2011 Section 42B(1)(a)(ii) repealed 1 July 2011 section 9(1) Financial Reporting Amendment Act 2011 Section 42B(1)(e) added 1 July 2011 section 9(2) Financial Reporting Amendment Act 2011 Section 42B(1)(f) added 1 July 2011 section 9(2) Financial Reporting Amendment Act 2011 Section 42B(2) amended 1 July 2011 section 9(3) Financial Reporting Amendment Act 2011 Section 42B(2) amended 1 May 2011 section 82 Financial Markets Authority Act 2011
42C: Levies
1: Every person that is included in a prescribed class of specified persons must pay to the Crown, or a prescribed person on behalf of the Crown, a levy prescribed by regulations.
2: In this section and section 42D specified persons
a: chartered accountants who hold a certificate of public practice; and
b: licensed auditors; and
c: registered audit firms; and
d: the Auditor-General; and
e: issuers and other entities whose financial statements are required to be registered under this Act; and
f: every other person who is a member, fellow, or associate of an association of accountants specified in the regulations and that is in the business of offering accounting or auditing services to the public in New Zealand; and
g: public entities (within the meaning of the Public Audit Act 2001
h: every other person registered or incorporated, or who makes an application for registration or incorporation of a person, under any of the following Acts:
i: the Building Societies Act 1965
ii: the Companies Act 1993
iii: the Co-operative Companies Act 1996
iv: the Friendly Societies and Credit Unions Act 1982
v: the Industrial and Provident Societies Act 1908
vi: the Limited Partnerships Act 2008
3: The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations providing for the levies.
4: The levies must be prescribed on the basis that the following costs should be met fully out of the levies:
a: a portion of the costs of the Board performing its functions and exercising its powers and duties under this Act, where the size of the portion to be met by levies under this Act is determined by the Minister; and
b: the costs of collecting the levy money.
5: The levies may be prescribed on the basis that any actual cost that could have been, but has not been, recovered as a levy shortfall for a year may be recovered (along with any financing charge) over any period of up to 5 years.
6: The regulations may—
a: specify the class or classes of specified persons that are required to pay a levy:
b: provide for different levies for different classes of specified persons:
c: specify the amount of levies, or method of calculating or ascertaining the amount of levies:
d: include in levies, or provide for the inclusion in levies of, any shortfall in recovering the actual costs of exercising or performing the Board's functions, powers, and duties under this Act:
e: refund, or provide for refunds of, those levies:
f: provide for the payment and collection of those levies:
g: specify the financial year or part financial year to which those levies apply, and applying to that financial year or part financial year and each subsequent financial year until revoked or replaced:
h: for the first financial year to which a levy applies, include in the levy amount or method costs incurred by the Board on or after 1 July 2010 in connection with preparing itself to exercise and perform, and exercising and performing, its functions, powers, and duties under this Act, irrespective of the fact that the regulations are made and come into effect after that year:
i: require payment of a levy for a financial year or part financial year, irrespective of the fact that the regulations may be made after that financial year has commenced:
j: exempt or provide for exemptions from, and providing for waivers of, the whole or any part of the levy for any case or class of cases.
7: If a person is in 2 or more classes of specified persons in respect of which different levies have been prescribed, the person must pay each of those levies (unless the regulations provide otherwise).
8: The levies for a financial year that starts after the Board begins to carry out any additional function under this Act may cover the costs of performing that additional function, irrespective of the fact that the regulations may be made and come into effect after the start of the financial year.
9: The amount of any unpaid levy is recoverable in any court of competent jurisdiction as a debt due to the Board, or to any other person prescribed for the purposes of this subsection, on behalf of the Crown.
10: The Board, or any other person prescribed for the purposes of this subsection, must ensure that each levy payment is paid into a Crown Bank Account and is separately accounted for. Section 42C inserted 1 July 2011 section 10 Financial Reporting Amendment Act 2011
42D: Board must consult about request for appropriation
1: The Board must, before submitting a request to the Minister seeking an appropriation of public money for the following year, or any change to an appropriation for the current year, that relates to costs that are intended to be recovered by way of levies under section 42C
a: the persons or organisations that the Board considers are able to represent the views of those specified persons who are liable to pay a levy under that section; and
b: any other representatives of persons whom the Board believes to be significantly affected by a levy.
2: Consultation under subsection (1) must include consultation relating to the portion of the costs of the Board that should be met by the levies.
3: The Board must, at the time when the request is submitted, report to the Minister on the outcome of that consultation.
4: This section applies to requests in respect of the financial year beginning on 1 July 2013 and later financial years.
5: A failure to comply with this section does not affect the validity of any regulations made under section 42C Section 42D inserted 1 July 2011 section 10 Financial Reporting Amendment Act 2011
43: Administration of Act
The Registrar is charged with the administration of this Act.
44: Transitional provisions
1: Nothing in this Act shall apply in relation to an accounting period or an interim accounting period of an entity that is an industrial and provident society that ended before 1 July 1994 and, in relation to any such period, the Industrial and Provident Societies Act 1908
2: Nothing in this Act shall apply in relation to an accounting period or an interim accounting period of an entity that is an incorporated society that ended before 1 July 1994 and, in relation to any such period, the Incorporated Societies Act 1908
3: Nothing in this Act shall apply in relation to an accounting period or an interim accounting period of an entity that is a company (within the meaning of section 2 of the Companies Act 1955 Companies Act 1955
4: Nothing in this Act shall apply in relation to an accounting period or interim accounting period of an entity that is a unit trust (within the meaning of section 2 Unit Trusts Act 1960
5: Nothing in this Act shall apply in relation to an accounting period or an interim accounting period of an entity that is a building society (within the meaning of section 2 Building Societies Act 1965
6: Nothing in this Act shall apply in relation to an accounting period or interim accounting period of an entity that is a credit union or a society registered under Part 2 Friendly Societies and Credit Unions Act 1982
45: Repeals and revocations
1: The Companies Amendment Act 1969
2: The following enactments are hereby consequentially repealed:
(a)–(c): Amendment(s) incorporated in the Act(s).
3: The following orders are hereby revoked—
a: the Companies Accounts (Non-Exempt Private Companies) Exemption Order 1971 (SR 1971/20)
b: the Companies (Overseas Companies' Accounts) Order 1971 (SR 1971/21)
46: Amendment to Summary Proceedings Act 1957
Amendment(s) incorporated in the Act(s)
47: Amendment to Securities Act 1978
Amendment(s) incorporated in the Act(s)
48: Amendments to Public Finance Act 1989
Section 48 repealed 25 January 2005 section 200 Crown Entities Act 2004
49: Amendments to other Acts
The enactments specified in Schedule 2