New reporting requirements for South Australian charities and prescribed associations

Recent changes to the Associated Incorporations Act 1985 and the Collections for Charitable Purposes Act 1939 in South Australia will result in streamlined reporting for charities and prescribed associations that are registered with the Australian Charities and Not-for-Profits Commission (ACNC).

A ‘prescribed incorporated association’ has gross receipts (excluding member subscriptions) of more than $500,000 during a financial year.

When are the changes effective?

Charities and prescribed associations registered with the ACNC will still be required to lodge their audited financial statements with Consumer and Business Services (CBS) in South Australia for 2015/2016 years, and also for 2016/2017 years (depending on the period stipulated on their most recent licence).

In subsequent years, they will only be required to lodge financial statements with the ACNC (and not to CBS as well), and these financial statements will need to comply with ACNC requirements.

What if my charity or prescribed association does not meet the reporting thresholds under the Australian Charities and Not-for-Profits Commission Act 2012?

Small charities and associations with revenue less than $250,000 are not required to lodge audited financial statements with the ACNC. Instead, only an Annual Information Statement is to be lodged with the ACNC, which includes only minimal financial information.

Must I register my small charity or association with the ACNC?

There is no requirement for small charities and associations to register with the ACNC. However there are incentives to do so, including:

  • Not having to lodge audited financial statements with CBS, and
  • Access to certain tax concessions.

Small charities and associations not registered with the ACNC are still required to lodge audited financial statements with CBS.

What are the reporting requirements under the ACNC Act 2012 for charities and prescribed associations?

Reporting requirements are the same for all entities registered with the ACNC. That is, financial statements must be:

  • Audited if revenue is $1 million or more, and
  • Reviewed or audited if revenue is $250,000 to $999,999.

Because the financial reporting requirements contained in the Australian Charities and Not-for-profits Commission Act 2012 and Australian Charities and Not-for-profits Commission Regulation 2013 are more onerous than the current requirements for prescribed associations and charities, the ACNC will provide transitional relief for South Australian charities and associations reporting to the ACNC for the first time.

Under the ACNC Act 2012, these entities will be required to prepare, as a minimum, special purpose financial reports that comply with the following accounting standards, including comparatives:

  • AASB 101 Presentation of Financial Statements
  • AASB 107 Statement of Cash Flows
  • AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors
  • AASB 1048 Interpretation of Standards
  • AASB 1054 Australian Additional Disclosures.

Entities preparing general purpose financial reports because they are reporting entities should continue to do so.

The transitional relief provided by the ACNC for associations and charities preparing special purpose financial statements is included in the table below.

Period What to lodge with ACNC?
2017 reporting period (or 2018 for charities required to submit a 2017 periodic return with CBS) Same report that previously met South Australian requirements
2018 reporting period (or 2019 for charities required to submit a 2017 periodic return with CBS) Comply with AASB 101, 107, 108, 1048 and 1054

No comparatives but explain why (refer to ACNC’s example disclosure why comparatives not included)
2019 reporting period (or 2020 for charities required to submit a 2017 periodic return with CBS) Comply with AASB 101, 107, 108, 1048 and 1054

Comparatives required

What do these changes mean?

To comply with these minimum standards, you will need to apply accrual accounting and the financial statements must provide a ‘true and fair’ view. This means that if the impact would be material, the measurement and recognition requirements of all Australian Accounting Standards must be applied.

Action points

South Australian associations will need to consider the expanded reporting requirements for 2017 onwards, including disclosures and the impact on reported amounts (recognition and measurement). Please contact your engagement partner for assistance.