In June 2017, the Associations Incorporation Act 1991 (Act) was amended to remove the duplicated financial reporting requirements for ACT incorporated associations registered with the Australian Charities and Not-for-Profits Commission (ACNC). Up to now, the ACNC has provided transitional relief to incorporated associations and accepted the financial information submitted to the various state regulators. In many cases, this has resulted in associations lodging minimal financial information, and less than what would be required if it were reporting under the Australian Charities and Not-for-profits Commission Act 2012 (ACNC Act).
From 1 July 2017, ACNC-registered associations incorporated in the Australian Capital Territory will only submit financial information (Annual Information Statement and financial statements) to the ACNC. These will no longer be submitted to Access Canberra.
The implication of this is that the minimal income statement and balance sheet required for ACT incorporations will need to be ‘stepped up’ to meet the requirements of the ACNC Act, including preparing either general purpose financial statements in full or with reduced disclosures, or if preparing special purpose financial statements, complying with, as a minimum, with the following accounting standards, including comparatives:
Applying the above standards means that accrual accounting will be applied.
1 July 2017 is a ‘drop dead’ date, meaning that from that date onwards, financial information is submitted to the ACNC rather than access Canberra.
ABC Association has $2 million and is therefore classified as ‘large’ and must lodge audited financial statements with the ACNC within six months of the end of its reporting period.
Year end is 30 June 2017.
ABC’s financial statements for its 2016-2017 year (i.e. ended 30 June 2017) will be lodged with the ACNC only, and not Access Canberra.
The ACNC Act does not require ACNC-registered charities to hold an annual general meeting. However, s69 of the Associated Incorporations Act 1991 still requires ACT incorporated associations to hold an AGM within five months of the end of the reporting period. Although the deadline for reporting to the ACNC is six months after the end of the reporting period, ACNC registered associations will likely complete their financial reporting within five months so as to make these available for discussion at the AGM.
‘Small’ 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. However, ‘medium’ associations with revenue less than $1 million must have their financial statements reviewed by a registered company auditor.
Because the financial reporting requirements contained in the ACNC Act are more onerous than the current requirements for ACT associations, the ACNC will provide transitional relief for ACT associations reporting to the ACNC for the first time.
The transitional relief provided by the ACNC for ACT associations preparing special purpose financial statements is included in the table below.
|Period||What to lodge with ACNC?|
|Ending 30 June 2017 (or any later period approved by the ACNC Commissioner)||Same report that previously met ACT requirements|
|Ending 30 June 2018 (or any later period approved by the ACNC Commissioner)||Comply with AASB 101, 107, 108, 148 and 1054
No comparatives but explain why (refer to ACNC’s example disclosure why comparatives not included)
|2019 reporting period and beyond||Comply with AASB 101, 107, 108, 148 and 1054