INTHEBLACK February 2023 - Magazine - Page 22
F E AT U R E
new standard. However, an indicative range
of annual revenues between A$500,000 and
A$3 million has been provided as a guideline.
The key objectives for the standard are to cut
preparation costs, to improve the comparability
and quality of financial reporting, and
to introduce consistent recognition and
measurement requirements for smaller NFPs.
According to the discussion paper, the
proposed Tier 3 standard would specify the
accounting requirements for smaller NFPs in
an easy-to-understand manner and is expected
to include guidance to assist with applying the
requirements.
Under these proposals, smaller NFPs
would be subject to reduced recognition,
measurement and disclosure requirements
compared to full AAS.
The AASB does not intend to develop
service reporting requirements as part of its
22 INTHEBLACK February 2023
current project, establish reporting thresholds,
change the existing Tier 1 or Tier 2 AAS,
or to develop an even simpler accounting
standard for a fourth reporting tier.
“The project is addressing the feedback
from stakeholders that the Australian
reporting requirements were overly complex
for application by smaller not-for-profit
private sector entities, and current reporting
requirements may not result in the comparable
reporting,” says Nikole Gyles FCPA, technical
director at the AASB.
“For example, the use of special purpose
financial statements remains extensive, with
36 per cent of charities lodging financial
statements that are publicly available,
leading to a lack of comparability in financial
reporting for the not-for-profit sector.”
Gyles says some of the key proposals
include a new income recognition model