AICD submission to AASB on simplifying Australia’s Not-for-Profit Financial Reporting Framework

The AICD strongly supported the development of a Tier 3 Standard that is simple, proportionate, consistent, and transparent for application by smaller NFPs, noting the proposed prohibition of preparing special purpose financial statements (SPFS), including in principle support for the three-year transition period from standard issuance to commencement for both exposure drafts.

The AICD also provided related comments on the following matters:

• Reporting thresholds: The AICD supports the previous ACNC recommendation for the AASB to propose a clear reporting threshold for the Tier 3 standard, which would provide clarity and consistency for the NFP sector, especially given the potential impact on smaller charities with greater reliance on volunteers.
• Government initiatives: The AASB should also seek to consider relevant reforms holistically in coordination with other NFP red tape reduction initiatives including reforms from the Productivity Commission Final Report on philanthropic giving and the Not-for-Profit Development Sector Blueprint, once Government responds in full to both reports.
• Education and guidance: The AICD encourages the AASB (and the ACNC) to commit dedicated resources to meet the significant challenge of educating the substantial number of NFPs which would be required to transition from SPFS to GPFS.