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Charities and NFPs to comply with new accounting disclosures

Business

Charities and not-for-profits will be expected to make new accounting disclosures from their compliance with recognition and measurement requirements.

By Naomi Neilson2 minute read
Parliament House

The Australian Accounting Standards Board (AASB) said these disclosures will come into effect from 30 June, but noted they are not “onerous”, as entities are only expected to disclose information on accounting procedures based on what they already know.

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“You are not expected to undertake a detailed assessment of your accounting policies – instead, you disclose what you already know about whether or not your accounting policies comply with AAS, or if you don’t know, disclose that fact,” AASB said.

The new disclosures will apply to charities registered with the Australian Charities and Not-for-profits Commission (ACNC) with annual revenue equal or more than $250,000 preparing special purpose financial statements (SPFS). A not-for-profit that has been lodging SPFS with ASIC under Corporations Act 2001 is also expected to do so.

The AASB said this came from a lack of clarity in SPFS about whether policies comply with recognition and measurement requirements. Research found almost half of entities were unclear about whether they had complied, leading to inconsistencies.

“At the same time, for the users of financial information, comparability, transparency and consistency of financial statements is important and they need to clarify in order to understand what additional financial information they may need,” AASB added.

Charities and NFPs to comply with new accounting disclosures
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Emma Ryan

Emma Ryan

AUTHOR

Emma Ryan is the deputy head of content at Momentum Media and editor of the company's legal publication, Lawyers Weekly.

Emma has worked for Momentum Media since 2015 and has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.

A journalist by training, Emma has spent her career connecting with key industry stakeholders across a variety of platforms, including online, podcast and radio. She graduated from Charles Sturt University with a Bachelor of Communications (Journalism).

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