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Companies Act 1993

Accounting records and financial reporting - Financial reporting - Preparation of financial statements

204: Financial statements for overseas company must include financial statements for large New Zealand business

You could also call this:

“Overseas companies with large NZ operations must report separate NZ financial statements”

If you’re an overseas company with a big business in New Zealand, you need to make special financial statements. These statements should show how your New Zealand part of the business is doing, just like it was a separate company in New Zealand.

If your overseas company is part of a group and the group has a big business in New Zealand, you need to do the same thing. You should make financial statements for the New Zealand part of the group’s business.

Your New Zealand business is considered ‘big’ if it has more than $22 million in total assets or more than $11 million in total revenue for two years in a row.

There’s a special board called the External Reporting Board that makes rules about how to figure out if your business is ‘big’.

Even if you don’t have to make financial statements for your whole overseas company, you still need to make them for your New Zealand business if it’s big enough.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM320899.

Topics:
Business > Industry rules
Business > Fair trading
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203: Recognition of financial reporting requirements of overseas countries, or

“Overseas financial statements can be accepted if they meet similar standards”

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205: Balance date of subsidiaries, or

“Aligning financial year-ends for parent companies and their subsidiaries”

Part 11 Accounting records and financial reporting
Financial reporting: Preparation of financial statements

204Financial statements for overseas company must include financial statements for large New Zealand business

  1. If an overseas company is required to prepare financial statements under section 201 and its New Zealand business is large, the financial statements that are prepared must include, in addition to the financial statements of the overseas company, financial statements for its New Zealand business prepared as if that business were conducted by a company formed and registered in New Zealand.

  2. If an overseas company is required to prepare group financial statements under section 202 and the group's New Zealand business is large, the group financial statements that are prepared must include, in addition to the financial statements of the group, financial statements for the group's New Zealand business prepared as if the members of the group were companies formed and registered in New Zealand.

  3. In this section, the New Zealand business or the group's New Zealand business is large in respect of an accounting period if at least 1 of the following paragraphs applies (calculated as if that business were an entity):

  4. as at the balance date of each of the 2 preceding accounting periods, the total assets of the business exceed $22 million:
    1. in each of the 2 preceding accounting periods, the total revenue of the business exceeds $11 million.

      1. A financial reporting standard (or a part of a standard) issued by the External Reporting Board that is expressed as applying for the purposes of subsection (3) must be applied in determining whether that provision applies.

      2. If an overseas company has been granted an exemption under section 207L from a requirement to prepare financial statements under section 201 or group financial statements under section 202, subsection (1) or (2) (as the case may be) still applies (except that the financial statements for the New Zealand business are not in addition to the financial statements of the overseas company or its group).

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      Notes
      • Section 204: replaced, on , by section 30 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
      • Section 204(3)(a): amended, on , by regulation 9(1) of the Financial Reporting (Inflation Adjustments) Regulations 2021 (LI 2021/307).
      • Section 204(3)(b): amended, on , by regulation 9(2) of the Financial Reporting (Inflation Adjustments) Regulations 2021 (LI 2021/307).