The Australian Charities and Not-for-Profits Commission Act 2012 (Cth) (ACNC Act) imposes a new annual reporting framework on entities registered with the Australian Charities and Not-for-Profits Commission (ACNC).
The ACNC requires charities (and later, other not-for- profit organisations) to provide two types of annual reporting:
• annual information statements for the 2012-13 financial year and beyond; and
• annual financial reports for the 2013-14 financial year and beyond (please note that this is only for medium and large charities and does not include basic religious charities, as defined in the ACNC Act).
We have known for some time what will generally be required in the annual information statement. With respect, however, to the annual financial reports, the Government has recently released draft Regulations setting out the financial reporting requirements (and also explanatory materials) which are due to come into effect on 1 July 2013.
Copies of these documents are available on the ACNC website (www.acnc.gov.au). Please note that the consultation period has closed and that submissions will be considered when finalising the Regulations.
We provide a summary below about what is required for annual reporting to the ACNC.
(a) 2012-13 financial year – annual information statement
For the 2012-13 financial year, all charities, regardless of their size, are only required to provide an annual information statement.
The form you need to fill out is currently being finalised and will be released soon. It is important to note that no financial information is required for this first annual information statement. The annual information statement will include information such as information about your purpose and activities.
Your charity must submit its annual information statement within six months of the end of your charity’s reporting period. This means that if your reporting period is 1 July 2012 to 30 June 2013, your statement is due on or before 31 December 2013. If your reporting period is 1 January 2013 to 31 December 2013, your statement is due on or before 30 June 2014.
(b) 2013-14 financial year and beyond – annual information statement and annual financial report For the 2013-14 financial year, small entities only need to provide annual information statements, whereas medium and large entities need to provide both an annual information statement and an annual financial report.
As you are aware, the ACNC defines the size of charities as follows:
• small – annual revenue is less than $250,000;
• medium – annual revenue is $250,000 or more but less than $1 million; and
• large – annual revenue is $1 million or more.
The draft Regulations set out the contents of the annual financial report as follows:
• financial statements for the year;
• notes to the financial statements (which must give a true and fair view of the financial position and performance of the entity); and
• a declaration about the statements and notes.
It is important to note that:
• the financial statements and notes will need to comply with accounting standards issued by the Australian Accounting Standards Board (the explanatory material sets out further detail about what compliance with accounting standards means);
• a large entity must have its financial reports audited; and
• a medium entity can choose to have its financial reports audited or reviewed.
As some entities will still be required to provide financial reports to other Government agencies, the ACNC may allow reports lodged with the ACNC to be provided to those agencies. This is a transitional measure and currently permitted under the ACNC Act up until the 2014-15 financial year.
Please note that for non-government schools, the ACNC is required to accept reports lodged under the Schools Assistance Act 2008, and these will be sufficient for the ACNC’s financial reporting requirements up until the 2014-15 financial year. Again, this is to address reporting duplication.
At this stage, just keep an ear out about the final annual information statement form as you may need to complete this as early as during the second half of 2013. We will provide a further summary about the annual financial report when the Regulations come into effect.
For more information, please contact: