What financial reporting standards should we apply for our annual financial statements?
The Public Benefit Entity (PBE) financial reporting that are mandatory standards for charities since 2015. If your organisation is a charity then we’d recommend you visiting the External Reporting Board (XRB) web site, and their FAQ section, as referenced below. If you are a not for profit, i.e. sports club, but not a registered charity, then you currently have a choice of preparing special purpose financial statements under the for profit framework, or adopting the PBE reporting. Please note that while it is currently not mandatory for a non-charity not for profit to adopt the new PBE reporting standards, there will be a time when this will be needed. Below is a table of the new PBE financial reporting framework, and minimum statutory requirements:
TIER | SIZE OF ORGANIZATION | ASSURANCE REQUIREMENTS | BASIS OF PREPARATION |
---|---|---|---|
2 | PBE with annual expenditure greater than $1 mil, and PBE with,annual expenditure greater than $2 mil, and less than $30 mil | Required to be audited | NZ,International Public Sector Accounting Standard [NZIPSAS] with RDR* |
3 | PBE with annual expenditure greater than $1 mil, and less than $2 mil | Required to be audited | PBE Simple Format Reporting accrual accounting |
3 | PBE with annual expenditure greater than $500,000, and less than $1 mil | Can choose an Audit or Review | PBE Simple Format Reporting accrual accounting |
3 | PBE with annual expenditure greater than $125,000 and less than $500,000 | No Audit or Review requirements | PBE Simple Format Reporting accrual accounting |
4 | PBE with annual expenditure less than $125,000 p.a. | No Audit or Review requirements | PBE Simple Format Reporting cash accounting |