1. The concept of comparability is important in General Purpose Financial Reporting (GPFR) due to issues of inter-period and inter-entity comparisons, as well as to maintain the efficiency of capital markets. Comparability also allows better decision-making to be informed.
2. The FOUR qualitative characteristics of GPFR are comparability, understandability, reliability, and relevance. The influences on these qualitative characteristics are: the balance between costs and benefits, the tension between the qualitative characteristics themselves, and the concepts of materiality and prudence.

Regulations controlling financial and non-financial reporting in NZ

1. Users of an entity's financial reports are its STAKEHOLDERS. For example, the stakeholders of Auckland International Airport would be the shareholders, Board of Directors, managers, employees, Auckland Regional Council, travellers, investors, sharebrokers, etc.
2. General Purpose Financial Reports are for users who do not have the power to demand the information they require. On the other hand, Special Purpose Financial Reports are for users who HAVE the power to demand the information they need (e.g. IRD and banks).

The application of Generally Accepted Accounting Practice (GAAP)

1. All companies are either "reporting entities" or "exempt companies". Reporting entities are entities in which the users are dependent on their financial information for decision-making but do not have the power to access or demand them. Reporting entities include issuers, medium and large companies, overseas companies, and subsidiaries. They have revenue above $1,000,000 and assets above $450,000.
2. Exempt companies (small companies) are those with revenue below $1,000,000 and assets below $450,000.
3. Issuers are entities or people who have allocated securities/shares to the public.
4. GAAP includes Financial Reporting Standards (FRSs), as well as appropriate practices that have authoritative support.

Framework for Differential Reporting

1. The Framework for Differential Reporting (FDR) allows exemptions from reporting requirements (GAAP). The FDR is important because the costs and benefits of compliance with FRSs vary between entities. Differential Reporting means reduced compliance costs, avoidance of standards overload, less reporting, and fewer disclosures.
2. To be eligible, the entity must at least be closely held, not large, or not publicly accountable. Large means Revenues>$5mil, Assets>$2.5mil, Employees>20. To be small, an entity must not meet two of the above criteria.
3. Exempt companies have to present a balance sheet and an income statement at the end of their accounting period. But they do not need to provide a cashflow statement. Characteristics of exempt companies are: managed by owners, limited resources ($), reliant on short-term financing, high level of trade debt, and reduced number of stakeholders.

Important accounting-related organisations in NZ and their functions

1. ASRB (Accounting Standards Review Board): funded by the Government. Its functions are to approve Financial Reporting Standards developed by the FRSB, give directives on appropriate actions that have authoritative support, provide suggestions on the development of the FRSs, and work together with the IASB towards the harmonisation of the New Zealand and International Financial Reporting Standards.
2. FRSB (Financial Reporting Standards Board): largely funded by members of ICANZ. Its functions are to develop reporting standards that are applicable to both the private and public sector entities, and submit the standards to the ASRB for approval.
3. NZSX (New Zealand Stock Exchange): operates as a place for the trading of financial securities.
4. Securities Commission: its purpose is to foster capital investment in New Zealand and to strengthen confidence in the New Zealand capital markets. This is achieved by promoting the efficiency and integrity of the NZ capital markets.
5. IASB (International Accounting Standars Board): exists to provide internationally harmonised accounting standards.