CHANGES TO ACCOUNTING STANDARDS FOR NFPs
Changes to the accounting standards were announced by the Australian Accounting Standards Board (AASB) in December 2016. Although these standards are not yet in force – they will apply to annual reporting periods beginning on or after 1 January 2019 – charities can adopt them early.
The AASB announced the following standards:
• AASB 1058 Income of Not-for-Profit Entities
• AASB 2016-7 Deferral of AASB 15 for Not-for-Profit Entities
• AASB 2016-8 Australian Implementation Guidance for Not-for-Profit Entities
These changes cover key areas including accounting for government grants, volunteer services and peppercorn rent arrangements.
The most significant changes are within AASB 15, which requires allocation of revenue in accordance with the satisfaction of the performance obligations of a contract.
The combination of AASB 15 and 1058 may result in recognising grant income earlier than initially expected, possibly impacting future grant or expenditure conditions.
For additional information about the forthcoming changes and how they may affect your Not-for-profit organisation we recommend that you contact our associated Chartered Accountancy practice, Steven J Miller & Co – see www.stevenjmiller.com.au