Review of the financial reporting structure in New Zealand

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22 Mar 2004

The government of New Zealand has begun a comprehensive review of that country's financial reporting act by publishing a discussion paper on The Financial Reporting Structure.

The Discussion Paper examines the specific needs of NZ companies and the users of their reports and considers the questions "who should be required to report" and "which reporting standards should they follow". The paper proposes a three-tier structure – full reporting using IFRS for publicly accountable entities, reduced requirements for larger non-publicly accountable entities, and no formal reporting required for small entities. Paragraphs 49-58 of the paper discuss the advantages of switching to IFRS in New Zealand. "The most significant advantage to New Zealand from adopting IFRS will be international comparability. International investors will be able to readily comprehend New Zealand financial reports without the need to first expend time and effort to understand New Zealand's financial reporting framework."

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