Government to Cut Financial Reporting Red Tape for Not for Profits
Tuesday, 8th December 2009 at 12:22 pm
Corporate Law Minister Chris Bowen says the changes will reduce unnecessary reporting obligations and deliver much needed relief from red tape for Australian charities and companies.
Currently, all companies limited by guarantee are required to prepare an audited financial report. The proposed changes are part of the draft federal reforms to cut red-tape and improve Australia’s corporate reporting framework.
The key measures to reduce red-tape include:
significantly reducing the regulatory burden on Not for Profits by introducing a three tiered differential reporting framework;
streamlining parent-entity reporting;
allowing companies to more easily change their year-end date to minimise the burden on companies and their auditors during peak reporting periods.
A report in The Australia newspaper says companies limited by guarantee with an annual turnover of less than $250,000 that cannot receive tax-deductible gifts will no longer be required to prepare a financial or directors’ report.
The report says those with an annual revenue of less than $1 million will still have to prepare a financial report, but they can elect to have it reviewed instead of audited.
It says they also will be able to prepare a streamlined directors’ report and will be subject to less onerous rules for distributing it. Companies limited by guarantee with an annual revenue of $1 million or more will still have to prepare audited annual reports.
The Minister says these are important reforms that will ensure that Australia’s financial reporting framework remains strong and ahead of world’s best practice.
Minister Bowen says he strongly encourages interested parties to participate in the consultation process.
The reforms are being implemented through the Corporations Amendment (Corporate Reporting Reform) Bill 2010, and the accompanying Regulations.
Copies of draft amendments, the explanatory material and the regulation impact statement can be obtained from the Treasury website: www.treasury.gov.au.
The closing date for submissions is 3 February 2010