Changes to New Zealand law expected to be enacted by mid-2013 would exempt for-profit entities that are neither issuers nor large (less than NZ$30 million revenue and less than NZ$60 million assets) from preparing general purpose financial reports (GPFR). In response to the proposed changes, the NZICA has established a Special Purpose Financial Statement Working Group in order to provide feedback to NZICA as it develops financial reporting guidelines for for-profit entities SMEs.

The guidelines will put forward a suggested financial reporting framework for SMEs to respond to the demands of specific external users of financial information. As the NZICA is no longer a standard-setter, there is no current intention to write a stand-alone suite of SME financial reporting standards or to make the framework mandatory.

Instead, the guidelines are proposed to include:

• a simple language forepart that is organised to reflect how SMEs operate and provides core reporting recommendations supplemented by diagrams to assist preparers in reaching clear outcomes
• appendices that provide linkage to the GPFR framework by using NZ IFRS as a reference for specific areas in order to avoid unnecessary duplication
• industry-based model financial statements.

NZICA is seeking the views on the overall approach taken on the framework initially through the survey. More information and links to the survey can be found on the NZICA website.