All Registered Charities are now required to prepare financial statements that comply with the External Reporting Board requirements. This is a total change for all charities. The following Tiers apply:
- Tier 1: for all charities that are publically accountable, or Very Large (>$30m annual expenses)
- Tier 2: for all charities that are Large (>$2m annual expenses)
- Tier 3: for all charities that are Medium ($2m > annual expenses >$125k)
- Tier 4: for all charities that are Small (<$125k annual expenses)
Note that a charity can choose to move up to a higher (lower numbered) Tier.
Other Not-For-Profit entities
Many Societies have historically prepared their financial statements using the Old GAAP reporting framework. This framework has now been terminated (for reporting periods commencing on or after 1 April 2015) and replaced with a series of GAAP and non-GAAP standards (as summarised in our overview).
If you are a not-for-profit Society that is not a registered charity, you are not compelled to comply with any of these standards. The Society may prepare Special Purpose Financial Statements, using whatever accounting policies and reporting disclosures are considered appropriate for the Society. The minimum requirement is to comply with the Incorporated Societies Act 1908 and prepare a simple balance sheet and Profit & Loss.
However, we understand that there is currently a review of the provisions of the Incorporated Societies Act 1908, and a consultation draft of the Incorporated Societies Bill is currently receiving submissions, which close on 30 June 2016. The current proposal in this Bill is for Incorporated Societies to adopt the GAAP or non-GAAP standards mentioned above.
There is a statutory obligation to prepare general purpose financial statements in accordance with the External Reporting Board standards.
If your organisation is not covered above please feel to contract us with your specific circumstances.
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