Your annual revenue and assets decide if your company should report your finances to minimum standards.
Minimum requirement of financial statements
Your financial statements must be made up of a:
- balance sheet of assets, liabilities, and net assets as at the end of the income year
- profit and loss statement showing income and expenditure during the income year
- statement of accounting policies.
Your statement of accounting policies should:
- set out applied or changed policies and assumptions
- give a description of the effect of any material changes in accounting policies used since the previous income year.
Your statements must comply with the following accounting principles:
- double entry method of recording transactions
- accrual accounting.
Your financial statements may show amounts using the valuation principles of:
- tax values, when they are consistent with double entry and accrual accounting
- historical cost, when tax values are not consistent with the accounting principles, or when historical cost gives a better basis of valuation
- market value, when they give a better basis of valuation than tax values and historical cost.
Your financial statements must show:
- comparable figures for the previous income year
- whether they have been prepared based on GST inclusive or exclusive
- reconciliation of your company's financial statements and taxable income for the income year
- taxation based schedule of fixed assets and depreciable property
- reconciliation of movements in shareholders' equity for the income year
- all amounts from the Financial summary - IR10 form relevant to your company
- notes to support exceptional items on the IR10.
You’ll need to ‘gross up’ the:
- interest and dividends received for resident withholding tax
- dividends received for imputation credits to the extent the dividend is taxable, and the credits are available to satisfy the company's income tax liability.
Certain types of businesses must provide additional industry specific information:
- Foresters must show information about the cost of timber as at the end of the income year and a reconciliation of movements.
- Owners of specified livestock must show details of livestock valuation methods, valuations, and calculations for tax purposes.
You will also need to show associated persons’ transactions including associated people that are not a company or a New Zealand tax resident. The transactions you need to show are:
- interest expense on loans from associates
- loans or other advances to associates
- expenses for services provided by associates
- expenses to associates for rent and leases
- expenses to associates for getting intangibles, including royalty payments.