Explanatory Notes
1
New Zealand enterprise
A New Zealand enterprise is a company, branch, partnership or any other
organisation which is located in New Zealand.
2
New Zealand group
A New Zealand group is made up of the New Zealand parent company and all its
New Zealand located subsidiaries and branches.
3
Residents and non-residents
A resident is any individual or enterprise ordinarily domiciled in New Zealand.
New Zealand registered branches and subsidiaries of foreign enterprises located in
New Zealand are regarded as New Zealand residents.
4
A non-resident is any individual or enterprise ordinarily domiciled in a country
other than New Zealand. Foreign branches and foreign subsidiaries of New
Zealand enterprises are regarded as non-residents.
Consolidated market value of New Zealand enterprise/branch
For unlisted enterprises if a market value is not available, please estimate the
market value of your shares by using one of the following methods, which are
listed in order of preference:
 A recent transaction price
 Directors valuation
 Net asset value
Net asset value is equal to total assets, including intangibles, less non-equity
liabilities and less the paid up value of non-voting shares. Assets and liabilities
should be recorded at estimated market value, rather than historical values.
For equity held in a branch, joint venture, partnership or trust, report the total
assets valued at current cost, less liabilities.
For listed enterprises the market value of equity should be reported using the
midpoint of the quoted buy and sell prices on the main stock exchange at the close
of business at the reporting dates specified.
5
Ordinary shares/voting stock
Ordinary shares/voting stock is the most common class of share. They generally
carry a full right to:
 vote on resolutions affecting the company;
 an equal share of ordinary dividends declared; and
 surplus assets on liquidation once debt holders and preferred shareholders have
received their entitlements.
In questions 2.4 and 3.2, if you do not know the exact percentage of shares held in
the overseas enterprise(s) then please make an estimate.
6
Country of non-resident
Country of non-resident refers to the country in which the immediate non-resident
counter-party resides.
7
Consolidated market value of overseas enterprise/branch
For unlisted enterprises if a market value is not available, please estimate the
market value of your shares by using one of the following methods, which are
listed in order of preference:
 A recent transaction price
 Directors valuation
 Net asset value
Net asset value is equal to total assets, including intangibles, less non-equity
liabilities and less the paid up value of non-voting shares. Assets and liabilities
should be recorded at estimated market value, rather than historical values.
For equity held in a branch, joint venture, partnership or trust, report the total
assets valued at current cost, less liabilities.
For listed enterprises the market value of equity should be reported using the
midpoint of the quoted buy and sell prices on the main stock exchange at the close
business at the reporting dates specified.
8
Direct investors
Non-resident direct investors include:
 non-residents (individuals, companies, branches, joint-ventures, partnerships,
trusts) that hold 10% or more of the ordinary shares or voting stock of any
enterprise in your New Zealand group;
 an overseas group of related enterprises that, when combined, hold 10% or
more of the ordinary shares or voting stock of any enterprise in your New
Zealand group.
For New Zealand branches of non-resident enterprises, the non-resident direct
investor is the head office of the branch.
9
Examples of non-resident direct investors include:
- your parent company in Australia that owns 50% of your enterprise
- a company in USA that owns 12% of your company
- two related companies (by equity ownership) in UK each owning 19% of your
company.
In question 2.4 under the non-resident direct investor category, report for all the
above investors individually by their country of residence.
Portfolio investors
Portfolio investors are non-resident shareholders that on an individual basis own
less than 10 percent of the voting/ordinary shares of your New Zealand enterprise.
Examples of non-resident portfolio investors include:
-
an Australian resident who owns 8% of shares in your enterprise;
-
a United States pension fund that owns 5% of shares in your enterprise
In question 2.4, you are asked to report the total shares held by all non-resident
portfolio investors in your enterprise and allocate the shareholdings to the country
of residence of the largest shareholder. In the example above the total shares held
by non-resident portfolio investors (ie 13%) would be allocated to Australia.
10
International financial liabilities
International financial liabilities include all legal claims on your enterprise/New
Zealand group by non-residents. For examples of financial liabilities refer to Notes
14 and Notes 16-20.
11
Value of liability
Value of liability refers to the market value of your enterprise's/New Zealand
group's financial liabilities to non-residents at the beginning and end of the year
respectively.
To value securities in question 4.3, use the traded price at the dates specified or if
not available, then make an estimate of market value using one of the following
methods:

the net present value of the expected stream of future payments associated with
the securities;

for unlisted securities, the price used to value securities for accounting or
regulatory purposes, etc; or

for deep discount or zero coupon securities, the issue price plus amortisation of
the discount.
12
International financial assets
International financial assets include all legal claims by your enterprise/New
Zealand group to non-residents. For examples of financial assets refer to Notes 1520.
13
Value of asset
Value of asset refers to the market value of your enterprise's/New Zealand group's
financial assets held with non-residents at the beginning and end of the year
respectively.
To value securities in question 5.3 use the traded price at the dates specified or if
not available, then make an estimate of market value using one of the following
methods:

the net present value of the expected stream of future receipts associated with
the securities;

for unlisted securities, the price used to value securities for accounting or
regulatory purposes, etc; or

for deep discount or zero coupon securities, the issue price plus amortisation of
the discount.
14
Accounts payable
Accounts payable include all amounts owing by your enterprise/New Zealand
group to non-residents for imports of goods, services and royalties. Include any
inter-company balances owed by your enterprise to your parent company/branch
overseas.
15
Accounts receivable
Accounts receivable include all amounts owing to your enterprise/New Zealand
group by non-residents for exports of goods, services and royalties. Include any
inter-company balances owing to your enterprise from your parent
company/branch overseas.
16
Bonds and notes
Bonds and notes are financial instruments that give the holder the unconditional
right to a fixed money income or a contractually determined variable money
income (payment of interest is not dependent upon the earnings of the debtor).
With the exception of perpetual bonds, bonds and notes also provide the holder
with the unconditional right to a fixed sum as a repayment of the principle on a
specified date or dates.
17
Deposits
Deposits include at-call deposits, transferable deposits (those that are exchangeable
on demand and transferable by cheque) and other deposits such as non-transferable
savings deposits, time/term deposits etc.
18
Loans
Loans are direct agreements between lenders and borrowers. They involve the
transfer of money to the borrower and the repayment to the lender over time.
Include repurchase agreements (repos) where the ownership of the security does
not change from the seller to the buyer (ie repo is treated as a collateralised loan).
19
Money market instruments
Money market instruments are securities generally giving the holder the
unconditional right to receive a stated, fixed sum of money on a specified date.
These instruments are usually traded at a discount in organised markets. Examples
include: bills of exchange (commercial and bank bills), certificates of deposit
(registered and bearer) etc.
20
Other financial assets/liabilities
Other financial assets/liabilities are those items not classified as bonds, notes,
money market instruments, accounts payable/receivable, loans and deposits.
Examples of other financial assets/liabilities include: overdue (i.e. past the
contractual payment date) interest payments/receipts, overdue dividend
payments/receipts etc.