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Incorporated Societies Act 2022

Administration of societies - Accounting records, financial reporting, and annual returns - Financial reporting

103: Definitions relating to financial reporting

You could also call this:

"What special words mean in financial reports"

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When you read about financial reporting, you need to know what some words mean. An applicable auditing and assurance standard is explained in section 5(1) of the Financial Reporting Act 2013. Generally accepted accounting practice is explained in section 8 of the Financial Reporting Act 2013. You also need to know what a non-GAAP standard is. It is explained in section 5(1) of the Financial Reporting Act 2013. A qualified auditor is someone who meets the requirements in section 35 of the Financial Reporting Act 2013. When you are looking at a society's financial reports, you might see that it is a specified not-for-profit entity. This means it meets the rules in section 46 of the Financial Reporting Act 2013. A small society is one that has less than $50,000 in total operating payments and less than $50,000 in total current assets, and is not a donee organisation as described in section LD 3(2) of the Income Tax Act 2007. If a society is new, it might not have two years of financial reports. In this case, it can use a different test to see if it is a small society. The test looks at the society's total operating payments and total current assets for the current year. It also checks if the society is a donee organisation as described in section LD 3(2) of the Income Tax Act 2007. Total current assets is explained in the regulations.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS254710.

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102: Annual financial statements must be prepared and registered, or

"Societies must prepare and register their yearly financial statements on time."

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Part 3Administration of societies
Accounting records, financial reporting, and annual returns: Financial reporting

103Definitions relating to financial reporting

  1. In this subpart,—

    applicable auditing and assurance standard has the same meaning as in section 5(1) of the Financial Reporting Act 2013

      generally accepted accounting practice has the same meaning as in section 8 of the Financial Reporting Act 2013

        non-GAAP standard has the same meaning as in section 5(1) of the Financial Reporting Act 2013

          qualified auditor has the same meaning as in section 35 of the Financial Reporting Act 2013.

          1. In this subpart, a society is, in respect of an accounting period,—

          2. a specified not-for-profit entity if it is such an entity in respect of that period under section 46 of the Financial Reporting Act 2013:
            1. a small society if,—
              1. in each of the 2 preceding accounting periods of the society, the total operating payments of the society are less than $50,000; and
                1. as at the balance date of each of the 2 preceding accounting periods, the total current assets of the society are less than $50,000; and
                  1. at the balance date of the accounting period, the society is not an entity described in section LD 3(2) of the Income Tax Act 2007 (a donee organisation).

                  2. Subsection (4) applies for the purposes of this subpart if—

                  3. a society is preparing financial statements for an accounting period (the relevant period); but
                    1. the society does not have 2 preceding accounting periods as referred to in subsection (2)(b).

                        1. Example

                        A society is preparing financial statements for an accounting period ending on 31 December 2026. The society was only incorporated in 2025. The society cannot apply the test as to whether it is a small society in subsection (2)(b) because it was not in existence for 2 accounting periods before the relevant period. Instead, it may apply the test in subsection (4).

                      1. The society is a small society in respect of the relevant period if,—

                      2. in the relevant period, the total operating payments of the society are less than $50,000; and
                        1. as at the balance date of the relevant period, the total current assets of the society are less than $50,000; and
                          1. at the balance date of the relevant period, the society is not an entity described in section LD 3(2) of the Income Tax Act 2007 (a donee organisation).

                            1. For the purposes of this section, total current assets has the meaning set out in the regulations.