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 non-

financial 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