Changes to financial reporting obligations for charities
26 July 2021
What you need to know
- Small and medium charities may have their financial reporting obligations eased for reporting on the 2021-22 financial year.
- Large charities will be required to report remuneration paid to responsible persons (directors) and senior executives, where there are two or more key management personnel from 1 July 2022 (for the 2022 Annual Information Statement).
- All charities will be required to report related party transactions from 1 July 2023.
What you need to do
- Charities registered with the ACNC should review their obligations in light of the announced changes.
Background
Charities have financial reporting obligations to the ACNC, which differ based on the size of the charity. All charities are required to submit an Annual Information Statement within six months from the end of their reporting period. Medium and large charities must also submit an annual financial report, with medium charities having this either reviewed or audited, and large charities having this audited. Submission of an annual financial report is optional for small charities.
The size of the charity is determined by their total annual revenue.
New Thresholds
From 1 July 2022 (reporting against the 2021-22 financial year) small charities will be those with annual revenue under $500,000 (currently $250,000).
Medium charities will be those with annual revenue of $500,000 or more, but under $3 million (currently $1 million).
Greater Accountability
Large charities will be required to report aggregated remuneration paid to responsible persons (directors) and senior executives, if there are two or more key management personnel. This will be required for the 2022 Annual Information Statement.
From 1 July 2023, related party transactions will be required to be reported by all charities to the ACNC in their annual reporting.
Authors: Geoffrey Mann, Partner; Brownwyn Kirkwood, Counsel; and Tina Pantelidis, Seasonal Clerk.
