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Business valuations
We offer expert valuation advice in transactions, regulatory and administrative matters, and matters subject to dispute – valuing businesses, shares and intangible assets in a wide range of industries.
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Capital markets
You need corporate finance specialists experienced in international capital markets on your side if you’re buying or selling financial securities.
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Complex and international services
Our experience of multi-jurisdictional insolvencies coupled with our international reputation allows us to deliver the best possible outcome for all stakeholders.
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Corporate insolvency
Our corporate investigation and recovery teams can help you manage insolvency situations and facilitate the best outcome.
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Debt advisory
An optimal funding structure for your organisation presents unprecedented opportunities, but achieving this can be difficult without a trusted advisor.
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Expert witness
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Forensic and investigation services
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Independent business review
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IT forensics
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Raising finance
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Relationship property services
Grant Thornton offers high quality independent advice on the many financial issues associated with relationship property from considering an individual financial issue to all aspects of a complex settlement.
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Restructuring and turnaround
Grant Thornton’s restructuring and turnaround service capabilities include cash flow, liquidity management and forecasting; crisis and interim management; financial advisory services to companies and parties in transition and distress
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Transaction advisory
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Corporate tax
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Grant Thornton’s advisers can help you with PAYE (payroll tax), Kiwisaver, fringe benefits tax (FBT), student loans, global mobility services, international tax
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Global mobility services
Our team can help expatriates and their employers deal with tax and employment matters both in New Zealand and overseas. With the correct planning advice, employee allowances and benefits may be structured to avoid double taxation and achieve tax savings.
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GST
GST has the potential to become a minefield and can be expensive when it goes wrong. Our technical knowledge can help you minimise the negative impact of GST
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International tax
International tax rules are undergoing their biggest change in a generation. Tax authorities around the world are increasingly vigilant, especially when it comes to global operations.
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Research and Development
R&D tax incentives are often underused and misunderstood – is your business maximising opportunities for making claims?
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Tax compliance
Our advisers help clients manage the critical issue of compliance across accountancy regulations, corporation law and tax. We also offer business and wealth advisory services, which means we can provide a seamless and tax-effective offering to our clients.
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Transfer pricing
Tax authorities are demanding transparency in international arrangements. We businesses comply with regulations and use transfer pricing as a strategic planning tool.
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Audit methodology
Our five step audit methodology offers a high quality service wherever you are in the world and includes planning, risk assessment, testing internal controls, substantive testing, and concluding and reporting
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Audit technology
We apply our audit methodology with an integrated set of software tools known as the Voyager suite. Our technology has been developed to produce quality audits that are effective and efficient.
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Financial reporting advisory
Our financial reporting advisers have the expertise to help you deal with the constantly evolving regulatory environment.
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Business architecture
Our business architects help businesses with disruptive conditions, business expansion and competitive challenges; the deployment of your strategy is critical to success.
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Cloud services
Our team is led by cloud business experts who tailor services to the needs of your organisation, from strategy and implementation to ongoing services assurance.
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Internal audit
Our internal audits deliver independent assurance over key controls within your riskiest processes, proving what works and what doesn’t and recommending improvements.
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IT advisory
Our hands on product experience, extensive functional knowledge and industry insights help clients solve complex IT and technology issues
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IT privacy and security
IT privacy and security should support your business strategy. Our pragmatic approach focuses on reducing cyber security risks specific to your organisation
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Organisational & cultural change
The key to sustainable and future growth is a unified organisation operating within a strong cultural context, where transparency and communication are the priority for Kaimahi, and where visible leadership means walking the talk – but where does that journey begin?
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Payroll assurance
Our specialist payroll assurance team can conduct a review of your payroll system configuration and processes, and then help you and your team to implement any necessary recalculations.
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PCI DSS
Our information security specialists are approved Qualified Security Assessors (QSAs) that have been qualified by the PCI Security Standards Council to independently assess merchants and service providers.
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Process improvement
As your organisation grows in size and complexity, processes that were once enabling often become cumbersome and inefficient. To maintain growth, your business must remain flexible, agile and profitable
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Procurement/supply chain
Procurement and supply chain inputs will often dominate your balance sheet and constantly evolve for organisations to remain competitive and meet changing customer requirements
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Project assurance
Major programmes and projects expose you to significant financial and reputational risk throughout their life cycle. Don’t let these risks become a reality.
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Risk management
We understand that growing companies need to establish robust internal controls, and use information technology to effectively mitigate risk.
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Robotic process automation (RPA)
RPA is emerging as the most sophisticated form of automation used to help businesses become more agile and remain competitive in the face of today’s ongoing digital disruption.
Technical guidance for CFOs: How can you report COVID-19’s impact on your business?
Mark Hucklesby
23. March 2020
As the impact of COVID-19 continues to unfold in New Zealand and around the world, Directors and those preparing financial statements need to be cognisant of not only what’s happening now, but what is likely to happen next. Here’s our 10 ten questions organisations need to ask to ensure that financial statements yet to be issued are presented fairly.
- COVID-19 – the big picture: what should be included in financial statements that have not yet been authorised and approved for issue?
An organisation’s stakeholders will use financial statements to evaluate the magnitude of potential disruptions to their businesses and if any estimates are included, they will want insight into how these were calculated.
- Will the outbreak of COVID-19 result in more disclosures?
Almost certainly yes. In many situations, the outbreak will result in “new” obligations or uncertainties that an entity may not have previously recognised or disclosed in its financial statements. The additional disclosures will not only relate to the revenues, expenses, assets and liabilities they have already recognised, but also what might end up recognised in subsequent reporting periods
- There has recently been a significant drop in the value of equities so if you have a 31 December balance date, can your financial statements be adjusted for this?
No, because in many instances the relevant accounting standards will not permit this because the fall in value was not a result of fact and circumstances that existed at the balance date. However, what the accounting standards actively encourage is commentary and assessment of the impact of events after the balance date, provided what is disclosed can be reasonably estimated.
- If there is estimation uncertainty, what should be reported in financial statements?
In 31 March 2020 financial statements, for example, businesses will need to pinpoint where accounting estimates have been made and what assumptions were used to determine the amounts that are reflected in the financial statements. For example, a company may have perishable goods that due to market circumstances brought about by COVID-19, will have to be sold for less than it cost to produce them. Having never faced this situation, a range of selling prices exists which means the loss arising from having to write down the value of its inventory will also change. In many instances there will be a range of possible outcomes. Accounting standard setters encourage those preparing financial statements to indicate the sensitivity of any carrying amounts reflected in their financial statements to changes in the assumptions that impact on those carrying amounts. Lastly, if there have been any methodology changes in arriving at those estimated amounts, full disclosure of this should be made.
- How much hindsight can be reflected in financial statements?
Very little. Entities are required to determine amounts based on their knowledge of events at the balance date, not after it. This is particularly important when considering whether assets are impaired or not. The only situation where changes can be made is when additional evidence of conditions that existed at the end of the reporting period are uncovered. So, the determination of the recoverable amounts of an asset can only consider the information obtained after the reporting date if such conditions existed as of the reporting period end. So if your organisation has been severely affected by COVID 19 and plans to restructure its operations in 2020 as a consequence of this, you cannot take this post balance date decision and its economic consequences into account when determining the carrying amount of any assets that you are looking to impair if you have a 31 December 2019 balance date.
- Is it reasonable to take the view “the more uncertain the environment, then more detailed disclosures of the assumptions and assessments used to prepare the financial statements should be made?”
Yes. Those preparing financial statements should always be mindful of who will be reading them and how they might be used. If they anticipate that readers may not agree with their assessments and their assumptions, they should provide enough information to allow them to make their own judgments of what the carrying amounts should be.
- When assessing estimated credit losses (ECL), what should be taken into consideration?
Again, any assessment being made should only be based on information that existed at the reporting date. The expectation set out in accounting standards is that past events, current conditions and the forecast of future economic conditions for any financial asset that is not measured at fair value is clearly communicated in financial statements. ECL is a probability weighted amount that should be determined by evaluating a range of possible outcomes, and this is often overlooked. To make this assessment often takes a considerable amount of time and professional judgment.
- What should be taken into consideration when determining fair values at a reporting date?
The relevant accounting standard is NZ IFRS 13 Fair Value and it states the fair value of an asset or a liability at a measurement date is a specific exit price estimate that is based on assumptions (including those about risks) that market participants would make under current market conditions. Put another way: at the reporting date, what assumptions would market participants have made using all available information, including information that may be obtained through due diligence efforts that are usual and customary? Unobservable inputs will often have to be included to measure fair value to the extent that relevant observable inputs are not available. However, the key point to recognised is that the fair value measurement objective remains the same, i.e., an exit price at the measurement date from the perspective of a market participant.
- How much attention needs to be given to going concern for COVID-19?
A considerable amount. In assessing whether the going concern assumption is appropriate, the accounting profession
requires that all available information about the future, which is at least, but not limited to, twelve months from the date of authorising the financial statements for issue, be considered. One downside is that the longer it takes an entity to complete their financial statements after its balance date, the more information they need to take into consideration. So if the business is being audited, it should work very closely with its auditor to agree the level of analysis and evidence that is appropriate to support whatever going concern is made.
- Ultimately, what impacts of COVID 19 will the users of the financial statements be most interested in?
For many organisations, it will be how have they coped with the outbreak so far. Their focus should be on disclosing in their financial statements, what steps have been taken to contain and minimise the impact of this global event on their operations. Almost every entity with a 31 December 2019 balance date is likely to conclude that this outbreak is a non-adjusting event – but that does not absolve it from fully disclosing the post balance date consequences on the organisation and its future operations and activities. However, if your organisation has a later balance date, say 31 March 2020, then adjustments to the carrying amounts included in your financial statements will almost certainly be required if the organisation is in a position to quantify then. If not, then this should be disclosed as well because the objective of preparing any set of financial statements should be to provide readers with insight not only on the entity’s past activity, but also its current operating situation and its future viability.
