Issues Paper Launched on Accounting Standards for NFPs
Wednesday, 29th March 2017 at 4:05 pm
There needs to be a national conversation about financial reporting arrangements for the not-for-profit sector, according to a new issues paper on reporting and accounting standards.
Anglicare Australia, together with the Australian Charities and Not-for-profit Commission (ACNC) and the Australian Accounting Standards Board (AASB) launched the issues paper on Wednesday.
The paper, entitled Issues Paper: Better Financial Reporting for Australian NFPs focuses on financial reporting for the NFP sector. Anglicare Australia commissioned the paper from Dr David Gilchrist of Baxter-Lawley.
Gilchrist said in the introduction that there was a need for sector-wide participation in the national discussion pertaining to Australian Accounting Standards and their impact on the sector’s financial reporting arrangements.
“It seeks to do this by identifying the key issues and problems (including problems associated with relevance and administrative burden) faced by the sector,” Gilchrist said.
“It is great to see the ACNC, the Accounting Standards Board and the sector come together to recognise the importance of this project and the need to get financial reporting right for NFPs and charities in Australia.
“The setting of accounting standards for any sector is complex and relies on goodwill and engagement of all impacted. It is very pleasing to see this goodwill exists and that there is very real intent to get this right.”
The paper said that: “While the sector itself is varied and very complex—and different to the commercial sector but perhaps more akin to public sector organisations principally because of its focus on purpose rather than profit—the paper is focused on the transaction-neutral financial reporting framework formally established by the AASB and the issues this framework presents for the NFP and charitable sector”.
The paper asked whether the idea of a transaction-neutral accounting standards framework met the needs of the users of financial information or whether there needed to be a more nuanced, sector-specific path taken.
“This paper is not seeking to provide answers, but rather raises a set of 13 core questions which are intended to facilitate the national discussion,” Gilchrist said.
“Ultimately, the answers to these questions should come from the sector, regulators and the broader community.”
Gilchrist said while accounting standards may seem a technical area of limited interest, for a number of years there had been increased calls for increased reporting by Australia’s NFPs and charities.
“The problem continues to be that we do not know how this should look. This report is the first step in developing an understanding of how we might move forward,” Gilchrist said.
The paper is available at here.