The Australian Accounting Standards Board (AASB) said these disclosures will come into effect from 30 June, but noted they are not “onerous”, as entities are only expected to disclose information on accounting procedures based on what they already know.
“You are not expected to undertake a detailed assessment of your accounting policies – instead, you disclose what you already know about whether or not your accounting policies comply with AAS, or if you don’t know, disclose that fact,” AASB said.
The new disclosures will apply to charities registered with the Australian Charities and Not-for-profits Commission (ACNC) with annual revenue equal or more than $250,000 preparing special purpose financial statements (SPFS). A not-for-profit that has been lodging SPFS with ASIC under Corporations Act 2001 is also expected to do so.
The AASB said this came from a lack of clarity in SPFS about whether policies comply with recognition and measurement requirements. Research found almost half of entities were unclear about whether they had complied, leading to inconsistencies.
“At the same time, for the users of financial information, comparability, transparency and consistency of financial statements is important and they need to clarify in order to understand what additional financial information they may need,” AASB added.