20th April 2021 | Business
The Australian Charities and Not-for-profits Commission (ACNC) is set to introduce a relief in reporting requirements. The relief stems from the ACNC, federal and state governments, and relevant charities recognising the burden these organisations face when preparing financial statements.
This particularly applies when trying to navigate the various jurisdictions and reporting criteria set by legislative bodies, especially in the wake of COVID-19. These changes were recommended after an independent review was conducted on the Charities and Not-for-profits Commission Legislation in 2018 which suggested reducing the regulatory burden while retaining the transparency required to maintain public trust and confidence. Further details on the relief of ACNC financial reporting thresholds and commencement date are expected to be released by June 30, 2021, by the Council on Federal Financial Relations.
What are the proposed changes?
Together, the relevant parties have recommended the following changes to the reporting threshold:
|
Charity size |
Current annual revenue threshold |
Proposed annual revenue threshold |
ACNC requirements |
|
Small |
Less than $250,000 |
Less than $500,000 |
Annual Information Statement |
|
Medium |
From $250,000 to less than $1,000,000 |
From $500,000 to less than $3,000,000 |
Annual Information Statement and reviewed financial report |
|
Large |
$1,000,000 or more |
$3,000,000 or more |
Annual information statement and audited financial report |
Impact on the proposed changes
The proposed threshold changes will benefit the Charities and Not-for-profits Commission charity organisations in terms of relieving reporting requirements.
It is estimated that a number of charities will move to a lower reporting requirement threshold.
As a result, these organisations are anticipated to have reduced professional services fees, freeing funds and resources to help achieve their core purpose of serving and assisting the community.
Although the increase in thresholds will result in reduced reporting requirements for a number of these organisations, all these entities will still need to submit an Annual Information Statement as a minimum.
The Annual Information Statement will now include mandatory reporting of related party transactions to improve transparency and integrity of the organisations’ financial information.
Need help understanding the changes on proposed thresholds for ACNC charities?
The information provided above is a brief summary of the upcoming proposed changes to the Charities and Not-for-profits Commission thresholds.
The full implication and impact on the preparation, presentation and disclosure requirements of your organisation’s financial statements should be sought from your auditors or accountants.
If you would like further information on these changes, book a consultation with the friendly staff at Ax3 Group today to learn how these changes may affect your organisation. Simply call (03) 9995 7261 or send us a note via the contact form below.
Contact our amazing Auditors to be assured of your Not-for-profits
For more information, you can check the ASIC website