As we pass the half way mark of the reporting season, many Not for Profit (NFP) Boards and Committees are meeting to approve financial reports, prepare information for members and stakeholders and review lodgement requirements with the Australian Charities and Not-for-Profits Commission (ACNC). With this in mind we thought it timely to highlight some reporting obligations to save you costly mistakes.
Re-evaluate your size
It’s important you re-evaluate your size and be sure you are being classified in the correct class. NFP entitles are classified into the following three classes:
- Small – annual gross revenue less than $250,000
- Medium – annual gross revenue between $250,000 and $1,000,000
- Large – annual gross revenue greater than $1,000,000
The ACNC recently announced the results of their review of the 2014 financial reports which revealed classification of entity size was a common error. During the ACNC’s desktop review process, 27 charities were asked to revise their size classification on the charity register. Don’t let this mistake cost you time and money.
Financial Reporting Accuracy
There are a host of accounting issues that NFP entitles are being caught on, in particular, financial reporting issues with lodgments the ACNC receive. Here are a few common mistakes:
- Not including an appropriate accounting policy note (11% of reports reviewed didn’t have one)
- Not addressing all the required parts of AASB 101 Presentation of Financial Statements
- Not including related party disclosure in general purpose financial statements
- Not correctly disclosing revenue and cost of sales.
Hanrick Curran’s Financial Reporting Specialists, Michael Georghiou and Matthew Green, can help you understand the NFP requirements for financial reporting and take the guess work out of compliance matters. For more information contact Michael or Matthew on 07 3218 3900
More information on the ACNC can be found at www.acnc.gov.au