Not-for-profit reporting
Kerry Hicks FCA – Head of reporting
Who reports financial
accounting information
• Current practice
– Legislation determined
– Corporations Act tiering structure
introduced 1 July 2010
– Entities with DGR status all report under
Law, those NFPs (not DGR) completely
exempted if revenues < $250K
– Huge inconsistency in state reporting
from no reporting to full reporting
Who reports financial
accounting information
• Future considerations
– Priority to be given to consistency in
State reporting
– Some concern expressed by NFPs that
the thresholds are too low
What type of information is
reported
• Current practice – accounting
standards
– Limited by guarantee report in
accordance with CL (includes Australian
Accounting standards)
– Varying accounting practices exist for
Australian standards based on whether
the entity is a reporting entity or not
– Non-corporate NFPs have various
reporting requirements (and some none)
– Australian accounting standards are
IFRS based, single set of standards
What type of information is
reported
• Future considerations – accounting
standards
– Does one size (IFRS based) fit all?
– Simpler standards required with NFP
user focus
– Australian standards are changing and
likely to require general purpose
financial reporting, more complex for
some
– Jurisdiction developments show lack of
consistency across the world in this
space
International Developments in
NFP/charity financial reporting
• New Zealand
– Tiered reporting to be introduced, based
on IPSAS and not IFRS (multi-standard
approach)
• Canada
– Separate suite of accounting standards
for NFPs, based on Canadian GAAP
• UK
– UK IFRS for SMEs plus separate PBE
standard
• US
– Specific standards applicable
What type of information is
reported
• Current practice – other
requirements
– New directors report requirement from 1
July 2010 has introduced mandatory
‘non-financial reporting’
– Non-corporate NFPs have various
reporting requirements (and some none)
– Institute has produced a best practice
guide called ‘Enhancing not-for-profit
annual and financial reporting’
What type of information is
reported
• Future considerations – other
standards
– Keep directors report requirements at a
minimum
– Link between financial and non-financial
reporting information is tenuous
– IPSAS and AASB both have nonfinancial reporting projects in progress
How can the information be
reported efficiently
• Use of SBR needed
– Incentives to be provided
– SBR have already mapped financial
reporting standard requirements
– NFP extensions to be agreed between
major users (incl funders)
– Does SCOA meet the need for NFP
extensions?
– SBR have experience in negotiating
between state and commonwealth govts
to achieve minimum extensions