Recent accounting developments and regulatory updates in the NFP sector may present significant challenges for the June 2022 reporting period.
We’ve published Clarity publication Not-for-profit 2022 financial reporting update which outlines the key matters for NFP entities to consider in the current reporting season, including:
Post-implementation issues on income recognition
Adoption of the new AASB simplified disclosures framework
Amendments to Australian Charities and Not-for-profits Commission Regulations 2013 around increased financial reporting thresholds and new mandatory related party transaction disclosures for certain charities
The AASB has an ongoing project to develop a simple, proportionate, consistent and transparent financial reporting framework for Australian NFP private sector entities. In the development of this framework the Board are currently focussing on the drafting of a discussion paper (DP) for Tier 3 reporting requirements for NFP private sector entities. The primary objective of developing Tier 3 reporting requirements is to develop simplified financial reporting requirements.
Over a series of Board meetings, a number of issues have been discussed and debated around the principles that are going to be included in the DP.In terms of next steps, the approval of the DP is delegated to a subcommittee and is expected to be issued in early October 2022 with a consultation period of 6 months.
Post-implementation review – AASB 1059 Service Concession Arrangements: Grantors
In respect of the Post-implementation Review (PIR) of AASB 1059 Service Concession Arrangements: Grantors, the Board approved issuing an Invitation to Comment (ITC) for a 150-day comment period. A subcommittee of the Board is expected to finalise the ITC out of session in September 2022.
The Australian Charities and Not‑for‑profits Commission announces AIS extensions for NSW flood affected charities
Following floods in parts of New South Wales in early July 2022, ACNC is granting affected charities an automatic extension on their annual reporting deadlines. The ACNC recognises that this disaster may impact on the ability of charities in affected areas to submit their 2021 Annual Information Statement (AIS) by the due date and have therefore allowed charities in affected postcodes with a reporting period that ends between January and April 2022, to automatically be granted an extension to 31 October 2022 to submit their 2021 AIS.
The existing Australian Charities and Not‑for‑profits Commission Regulation 2013, which outline the requirements of the Australian Charities and Not‑for‑profits Register, the governance standards and external conduct standards applying to charities registered with the ACNC and requirements for registered charities’ annual financial reports, are scheduled to automatically sunset on 1 April 2023. The purpose of the draft Australian Charities and Not‑for‑profits Commission Regulations 2022 (the draft Regulations) is to remake the Australian Charities and Not-for profits Commission Regulation 2013 (the former Regulations) before it sunsets.
The changes made by the draft Regulations are minor amendments to reflect current drafting practice, improve clarity, and to remove provisions, such as transitional reporting arrangements, that are no longer required.
The consultation relating to the exposure draft released for the period 18 July 2022 – 15 August 2022 has now been completed. The proposed commencement date of the proposed draft Regulation is 1 April 2023.