The organisation that sets international financial reporting standards has amended an accounting rule that's been causing headaches for New Zealand firms.
New Zealand has been using IFRS since 2007, but the standards have been causing problems for some firms in recent times, because changes to depreciation rules meant companies had to include large deferred tax liabilities on their books.
Even the chair of the organisation that sets standards, Sir David Tweedie, admitted the particular accounting requirement was badly flawed, when he visited New Zealand earlier this year.
Now the International Accounting Standards Board has approved an amendment which will better reflect the tax obligations in countries without a capital gains tax.
Michele Embling of PricewaterhouseCoopers says it will make financial reporting more relevant to New Zealand conditions.
The amendments should be approved in New Zealand over the Christmas break and could be used by companies in coming months.
