Amendments to XRB A2 resulting from the Regulatory Systems (Economic Development) Amendment Act 2025
Background
The Financial Reporting Act 2013 (FRA) defines the terms ‘large’ and ‘specified not-for-profit entity’ – for the purpose of financial reporting requirements in legislation. For example, if a company is ‘large’ as defined in the FRA, it is required by law to prepare financial statements in accordance with GAAP. Also, registered charities and incorporated societies need to refer to the definition of ‘specified not-for-profit entity’ in the FRA to determine whether they are allowed in legislation report in accordance with the ‘non-GAAP’ Tier 4 Standard, or whether they must report in a higher tier.
The XRB standard XRB A2 Meaning of Specified Statutory Size Thresholds specifies the meaning of certain elements of the definitions of ‘large’ and ‘specified not-for-profit entity’ in the FRA.
Proposed amendments to XRB A2 to reflect amendments to the FRA
The Regulatory Systems (Economic Development) Amendment Act 2025, enacted on 29 March 2025, included amendments to the FRA that relate to the definitions of ‘large’ and ‘specified not-for-profit entity’. Specifically, the amendments to the FRA clarify that:
- If an entity (e.g. a company) has a subsidiary that meets the definition of ‘large’ per section 45 of the FRA, then the entity is also considered to meet the definition of ‘large’; and
- In the definition of ‘specified not-for-profit entity’ in section 46 of the FRA, the $140,000 operating payments threshold refers to the operating payments of the entity and all entities it controls (if any).
We propose to reflect these legislative amendments in XRB A2.
The proposed amendments to XRB A2 reflect amendments to the FRA, which were already consulted on by the Ministry of Business, Innovation and Employment, and which the XRB cannot change. However, we want to check if stakeholders have any comments on matters such as the clarity of the proposed amendments to XRB A2 or interactions with other standards.
Consultation closed on 22 July 2025
Submissions received: