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It’s been a tough year for local food and beverage manufacturers. Shoppers have cut their retail spending to cope with a rising cost of living and higher interest rates. Per capita retail spending has been falling since January, in tandem with a weakening labour market and rising unemployment.

It is year end and you’re probably feeling very organised, right? You’re already talking to your accountant and auditor regularly about the information you need to supply. You’re thinking about changes within your business that need to be incorporated into your reporting. You’ve agreed a timeline to make sure everyone is on the same page. Fantastic. Your business will be audited on time, your bank loan covenants will be met, stakeholders will be reassured, and your company’s reputation will be upheld. Wait, does that not sound familiar? Unfortunately, not all businesses are as organised as we might like them to be. In practice, companies collect up all the information they think is necessary and pass it onto their accountant hoping it will be sufficient. Partly this is because businesses are so caught up with other work that understandably seems more urgent. It can also be tricky to know what your accountant and auditor need to know – and the list can be long. What does your accountant need to know? Some of the major considerations are as follows. • If there were any findings, recommendations or inefficiencies identified by your accountant or auditor last year, take steps to address them and implement any necessary improvements. • Ensure you’re applying the right reporting standards and tier and you’re meeting deadlines like bank covenants and parent reporting requirements. • Set a timeline to ensure everyone is on the same page, and so that you or your team is available to address any questions or concerns promptly. • Estimates and judgements require careful consideration and review by management. These can include impaired inventory, changes in asset valuations or a change in asset useful life, and impairments. • Changes like new leases, amended lease terms, or adjustments affecting revenue recognition timing should be assessed. Evaluate how fluctuations in interest rates may impact your reporting accruals and provisions should also be considered. • Changes in rules could impact your accounting, such as depreciation on commercial property, or new accounting standards either internationally or locally. • There may be events you need to disclose and consider, like major transactions, or contingent assets and liabilities. • If you’ve changed your goods and services terms or offerings, this can affect how you account for income recognition. If this isn’t clearly understood, a large amount of analysis and rework may need to be completed in a short timeframe. • Have you closed an acquisition deal and immediately moved to the celebrations without thinking about how to account for it, or what the disclosure requirements and tax implications are? If so, you could be facing delays and unforeseen costs. These are just some of the possible considerations – the list goes on. Ideally you should maintain an ongoing dialogue with your accountants throughout the year to avoid unexpected issues at year-end. Incorrect or incomplete information can lead to inaccurate reporting. Getting it wrong can create big risks and serious costs Compliance failures can really snowball. Missing your internal timeframes including those of your Board, bank covenant reporting, allocated timeframes for audit, regulatory filings can all have major consequences. Worse still, if issues aren’t picked up until later, a restatement of your prior comparatives may be required. This would invariably result in increased costs, time delays, reputational damage, and potential increased scrutiny. These restatements are prominently noted in your financial statements for your readers to see. Failing to ensure robust planning for your financial statements process can also severely erode shareholder trust in the business, its governance, and its management teams. But all this can be avoided when a business is organised and clear channels of communication are maintained. As they say, a fail to plan, plan to fail.

During conversations we have with businesses about risk, it’s eye-opening to see how many aren’t really making it a priority.

Dan Lowe says uncertainty is the enemy of confidence and investment and that when it comes to property and construction, continuous tinkering with tax settings has made the sector an easy target.

We all know the population is aging and we all accept that our elderly population needs care. But aged care is drastically underfunded, the funding model is not fit for purpose, and we are rapidly in danger of running out of beds for the elderly.

As the country's primary healthcare crisis deepens, Pam Newlove looks at missed opportunities in Budget 2024 to support overbooked and underfunded GPs.

Did Budget 2024 give Kiwi business owners the certainty they need so they can plan for the future with confidence? Greg Thompson provides expert analysis.

A bold long term tax strategy is a key driver to solving New Zealand’s infrastructure woes. Murray Brewer analyses Budget 2024 to see if the Government delivered the fresh thinking needed to achieve future success instead short term cost savings.

Major public sector agencies have been instrumental in driving lasting benefit through strategic procurement and broader outcomes. Think hydro dams, railways and hospitals built by the previous generation. This approach has lifted the quality and resilience of public services, the capability of a range of suppliers and also set a precedent for addressing the burgeoning issue of infrastructure technical debt.

Our research into current internal audit (IA) environment throughout New Zealand’s public sector explores how leaders from a range of agencies are navigating the skills squeeze, budgetary bottlenecks, and their progress with IA innovation.

Grant Thornton New Zealand’s latest survey of over 200 business leaders and decision makers has revealed a significant uptick in optimism for the coming year despite many toughing it out in current economic conditions.

You know you can’t work forever – and you certainly aren’t immortal. But plenty of business owners are living as though they’re completely infallible.

It’s free, it’s easy, and it will immediately start saving you time. E-invoicing is a fantastic tool for any business. Plus, it could protect you from being scammed out of significant sums of money.

There’s new GST legislation in place for online marketplaces, which includes short-term accommodation platforms like Airbnb, ride-sharing platforms like Uber and delivery services like Uber Eats. These online platforms must now collect 15% GST and return it to Inland Revenue. This ‘app tax’ came into effect on 1 April 2024, and it’s already having an impact on the market.

The success of an acquisition largely hinges on the price paid relative to the value received. To ensure success, it’s crucial to gain a comprehensive view of not only the quality of earnings of a business but also the quality of the reporting itself. If you’re an investor performing due diligence, here are five key considerations about the quality of the target’s financial reporting.

The External Reporting Board (XRB) has released updated reporting thresholds for public benefit entities (PBEs): Tier Old criteria New criteria Tier 1* Total expenses greater than $30m Total expenses greater than $33m Tier 2 Total expenses less than $30m Total expenses less than $33m Tier 3 Total expenses less than $2m Total expenses less than $5m Tier 4 Total operating payments $140,000 No change *Note; an entity is also required to apply Tier 1 if it has “public accountability”. This decision is welcome as many PBE entities will see a reduction in reporting requirements and compliance costs. These thresholds have not been updated since 2012; in that time, various new pieces of legislation have been introduced and inflation has pushed many entities from Tier 3 to Tier 2 reporting without becoming any larger or more complex. Several new PBE standards have also been issued over the last decade, causing concerns that the costs of reporting exceeded the benefit to users under the previous size thresholds. Research by the XRB on the expenditure of PBE entities shows there is substantially less clustering around the $5 million threshold, compared to the $2 million threshold. In total there are 33 entities with total expenditure between $4.8 million and $5.2 million, while there are 115 entities with total expenditure between $2.8 million and $3.2 million. When does this change apply? The new thresholds are mandatory for periods beginning after 28 March 2024, which impacts 31 March 2025 balance dates onward. However, the change can be applied for periods that end after the standard takes effect (28 March), so those preparing reports for 31 March 2024 balance dates onward are also eligible. This news is timely for Incorporated Societies applying XRB PBE reporting standards for the first time under the Incorporated Societies Act 2022, as more Incorporated Societies will also now have lower reporting requirements. Determining your expenditure Total expenses for the purpose of determining a reporting threshold include all of an entity’s operating expenditure. This includes grants or donations made by an entity, but does not include capital expenditure (assets) or loan payments. How does it work in practice? If you now find yourself eligible to apply a lower reporting tier due to this change, it can be implemented immediately. However, you need to consider future expenditure as you may end up transitioning back quickly if this grows year on year. It’s also important to think about consolidation requirements if your entity sits within a group, so that a change in reporting tier at the entity level doesn’t interfere with group reporting. PBEs can apply requirements of a higher tier if they want to, so if you are happy to stay at the current reporting tier – that’s fine. For example, we have seen this with recently established PBEs that knew they would exceed the previous $2m expenditure threshold in future years, so they start by adopting Tier 2 rather than waiting until they hit the threshold. If your PBE previously applied Tier 1 requirements and you are transitioning to Tier 2 requirements due to your expenditure, the recognition and measurement accounting policies will remain the same, but there will be less disclosure requirements in the notes to the financial statements. Tier 2 and Tier 3 reporting requirements have some differences, mainly around presentation of revenue and expenses, and accounting for property, plant and equipment, investment property and publicly traded financial investments. Entities that previously applied Tier 2 requirements and are transitioning to Tier 3 can choose to either provide comparative data in accordance with Tier 2 requirements (i.e., leave it as it was) or restate them in line with Tier 3. If your entity is thinking about transitioning reporting tiers, start engaging in the process early so you can navigate this transition which can be deceptively complex at times.