New Zealand – Glossary Terms

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Accounts Payable

Amounts a business in New Zealand owes suppliers for goods or services received on credit, shown as a liability until...

Accounts Receivable

Money customers owe a company for credit sales; recognised as an asset in New Zealand accounting until cash is collected.

Accrual Accounting

Method where income and expenses in NZ accounts are recorded when earned or incurred, not when money is actually received...

Accrued Expenses

Costs like wages, rent, or utilities that are incurred but unpaid at balance date, classified as liabilities in New Zealand...

Accrued Income

Learn what accrued income is in New Zealand, examples like interest or services provided but not yet invoiced, and how...

Accumulated Depreciation

Learn what accumulated depreciation is in New Zealand, how it reduces asset value over time, and its role in financial...

Amortisation

The systematic spreading of the cost of intangible assets, such as goodwill, trademarks, or software, over their useful accounting life.

Annual Report

A yearly report in New Zealand providing shareholders with financial statements, performance analysis, and governance information.

Asset

Any item of value owned by a business, from cash and vehicles to property, that is expected to deliver future...

Asset Turnover Ratio

Learn what the asset turnover ratio is in New Zealand, how it measures efficiency, the formula for calculation, and examples...

Audit

An independent examination of a company’s NZ financial records to confirm compliance with laws, accuracy, and fairness of reporting.

Bad Debts

Learn what bad debts are in New Zealand, how they occur when customers can’t pay, and the IRD rules for...

Balance Date

The official end of a business’s financial year in New Zealand, commonly 31 March, when accounts and reports must be...

Balance Sheet

Financial statement listing assets, liabilities, and equity at a set date, providing a clear picture of business health in NZ...

Bank Reconciliation

Process of matching business records with New Zealand bank statements to detect errors, fraud, or timing differences in cash.

Bookkeeping

Recording daily financial transactions such as sales, expenses, and payroll in New Zealand businesses to support compliance and reporting.

Break-Even Point

Learn what the break-even point is in New Zealand, how to calculate it, and why it’s vital for pricing, profitability,...

Capital

Money or resources invested by owners or shareholders in a New Zealand company, used to fund operations, growth, and long-term...

Capital Expenditure (CapEx)

Funds spent on acquiring or upgrading long-term business assets like equipment or property, vital in NZ accounting.

Capital Gains Tax (CGT)

New Zealand does not impose a broad CGT, but certain property sales and investments may be taxed under existing rules.

Cash Accounting

A simple method where New Zealand businesses record income when cash is received and expenses only when money is paid...

Cash Flow

The actual inflow and outflow of cash within a NZ business, showing liquidity strength and ability to meet operating obligations.

Cash Flow Statement

Learn what a cash flow statement is in New Zealand, how it tracks operating, investing, and financing cash movements, and...

Chart of Accounts

The structured list of all account categories in a New Zealand business, used to classify income, expenses, assets, and liabilities.

Company Tax Rate

In New Zealand, companies are taxed at a flat 28% rate on their profits, with obligations managed by Inland Revenue...

Consolidated Accounts

Financial statements combining a parent company and subsidiaries, required for New Zealand groups to show overall results.

Contingent Liability

A possible business obligation in NZ that depends on a future event, like pending litigation or unresolved guarantees.

Contribution Margin

Learn what contribution margin is in New Zealand, how it’s calculated, and why it’s key for pricing, profitability, and break-even...

Cost of Goods Sold (COGS)

Direct costs of producing or sourcing goods for sale, including raw materials and labour, in NZ profit calculations.

Credit Note

A document issued by New Zealand businesses to reduce a customer’s balance, often for returned goods, refunds, or invoice corrections.

Current Liability

Short-term debts or obligations due within 12 months, such as GST payable, trade creditors, or short-term loans in NZ accounts.

Debit Note

Learn what a debit note is in New Zealand, how it’s used in accounting between buyers and suppliers, and examples...

Deferred Income

In New Zealand, deferred income is money received in advance for services or goods not yet delivered, treated as a...

Depreciation

In New Zealand, deferred income is money received in advance for services or goods not yet delivered, treated as a...

Directors’ Report

Learn what a directors’ report is in New Zealand, what it includes, and the reporting requirements for companies under the...

Dividend

Learn what a dividend is in New Zealand, the different types (cash, stock, interim), and how dividends are taxed under...

Dividends

Payments a New Zealand company makes to its shareholders from profits, either in cash or shares, usually after income tax...

Earnings Per Share (EPS)

Learn what Earnings Per Share (EPS) means in New Zealand, how it’s calculated, and why it’s important for investors and...

Equity

Represents the residual interest in a New Zealand business after deducting liabilities from assets, often referred to as owners’ or...

Expense

Costs incurred in operating a New Zealand business, such as wages, rent, or utilities, which reduce taxable profit when recorded...

Fair Value

The estimated price an asset or liability could achieve in a New Zealand market transaction, often used in revaluations and...

Financial Statements

Reports such as the balance sheet, income statement, and cash flow, required in NZ to show a business’s performance and...

Fixed Asset

Tangible long-term resources like land, property, or equipment that a New Zealand business uses in operations for more than 12...

Fringe Benefit Tax (FBT)

A New Zealand tax on perks provided to employees, such as company cars or subsidised loans, paid by the employer...

General Ledger

The main accounting record in a NZ business containing all accounts for assets, liabilities, income, and expenses used in reporting.

Goods and Services Tax (GST)

Learn what GST means in New Zealand, who needs to register, current GST rates, and how to file GST returns...

Goodwill

The intangible value of a New Zealand business’s reputation, customer relationships, and brand, recognised when one company acquires another.

Gross Profit

Sales revenue minus the cost of goods sold, showing the core profitability of a NZ business before overheads, taxes, and...

GST Return

Learn what a GST return is in New Zealand, how often it must be filed, and the IRD rules for...

Imputation Credits

Learn what imputation credits are in New Zealand, how they reduce double taxation on dividends, and the rules for shareholders...

Income Statement

Also called profit and loss, this NZ report shows income, expenses, and profit over a period, helping assess performance trends.

Income Tax

Learn what income tax is in New Zealand, current IRD tax rates for individuals and businesses, and filing requirements for...

Intangible Assets

Non-physical resources such as patents, software, or trademarks that hold value and appear on NZ company balance sheets if acquired.

Inventory

Goods held for sale by a New Zealand business, including raw materials, work in progress, and finished stock, valued under...

Journal Entry

A basic NZ accounting record noting a financial transaction with debit and credit entries, forming part of the double-entry system.

KiwiSaver

Learn what KiwiSaver is in New Zealand, how contributions work for employees and employers, and the benefits of saving for...

Liability

A present financial obligation of a NZ business arising from past transactions, such as loans or accounts payable, settled in...

Liquidation

The process of winding up a NZ business by selling assets to pay creditors, usually overseen by a liquidator when...

Liquidity

A measure of how quickly a NZ business can convert assets to cash to meet short-term obligations, indicating financial stability...

Long-Term Loan

Learn what a long-term loan is in New Zealand, how it’s recorded as a non-current liability, and examples of business...

Loss

In New Zealand accounting, a loss occurs when total business expenses exceed income for a given period, reducing equity and...

Management Accounts

Internal financial reports in NZ businesses that provide owners and managers with up-to-date insights for decision-making and planning.

Mortgage

A long-term loan in New Zealand secured against property, commonly used by businesses to acquire real estate or by individuals...

Net Profit

Learn what net profit means in New Zealand accounting, how it’s calculated after all expenses, and why it’s key for...

Net Worth

In New Zealand, net worth equals total assets minus total liabilities, representing the true financial position of an individual or...

Nominal Ledger

The central ledger in NZ accounting systems, containing all accounts for assets, liabilities, income, and expenses, used to prepare reports.

Non-Current Asset

Assets in NZ held for more than 12 months, such as property, vehicles, or long-term investments, providing future economic benefit.

Non-Current Liability

Learn what non-current liabilities are in New Zealand, examples like long-term loans or leases, and how they are reported under...

Overhead

Learn what overhead costs mean in New Zealand, the types of overheads businesses face, and how they affect pricing, profitability,...

Overheads

Learn what overheads are in New Zealand, the different types like fixed and variable, and how they impact profitability and...

Pay As You Earn (PAYE)

Learn what PAYE means in New Zealand, how employers deduct it from wages, and IRD’s rules for payday filing, tax...

Payroll

Learn what payroll means in New Zealand, the employer’s responsibilities under IRD rules, and how payroll impacts wages, PAYE, KiwiSaver,...

Petty Cash

Learn what petty cash is in New Zealand, how businesses use it for small expenses, and the best practices for...

Prepaid Expenses

Learn what prepaid expenses are in New Zealand, examples like insurance or rent, and how they are recorded as current...

Profit and Loss Account

Learn what a profit and loss account is in New Zealand, what it includes, and how businesses use it to...

Profit Margin

Learn what profit margin means in New Zealand, how to calculate gross and net margins, and why they matter for...

Provision

Learn what a provision is in New Zealand accounting, the different types like tax or doubtful debts, and how provisions...

Provisional Tax

Learn what provisional tax is in New Zealand, who needs to pay it, due dates, and how it helps businesses...

Purchase Order

Learn what a purchase order (PO) is in New Zealand, how businesses use them to control spending, and why they...

Resident Withholding Tax (RWT)

Learn what Resident Withholding Tax (RWT) is in New Zealand, the current rates on interest and dividends, and IRD rules...

Retained Earnings

Learn what retained earnings are in New Zealand, how they’re calculated from profits, and their role in dividends, reinvestment, and...

Sales Return

Learn what a sales return is in New Zealand, how businesses record returned goods, and the accounting treatment under NZ...

Secured Loan

Learn what a secured loan is in New Zealand, how collateral works, examples like mortgages and asset finance, and how...

Statement of Changes in Equity

Learn what the statement of changes in equity is in New Zealand, what it includes, and why it’s essential for...

Terminal Tax

Learn what terminal tax is in New Zealand, who pays it, due dates, and how it works with provisional tax...

Trial Balance

Learn what a trial balance is in New Zealand, how it’s prepared, and why it’s an essential step in ensuring...

Work in Progress (WIP)

Learn what work in progress (WIP) means in New Zealand accounting, with examples from construction and manufacturing, and how it...

Write-Off

Learn what a write-off is in New Zealand accounting, examples like bad debts and obsolete assets, and how write-offs are...

New Zealand – Glossary Terms

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