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15 Aug. 2019

Research Report 11 Review of Special Purpose Financial Statements: Large and Medium-Sized Australian Charities

Research Report 11 findings indicate that for the 36% of charities lodging special purpose financial statements (SPFS) with ACNC, the transparency of these SPFS is poor. Only 26% of charities preparing SPFS state whether they comply with all recognition and measurement (R&M) requirements in Australian Accounting Standards, 30% state they do not comply, and for the remaining 44%, it is not clear whether or not they complied with R&M requirements.

These findings support the AASB’s decision to address improvements in the not-for-profit sector separately to the for-profit sector, as the impact of specifying R&M requirements will be much greater in this sector. This Report is part of a larger project by the AASB, supported by the Auditing and Assurance Standards Board (AUASB), to assist in reforming the financial reporting framework in Australia for all sectors, and the findings from this research are critical to determining the need for, and extent of, reform. The goal of the project for the charitable sector is to achieve financial reporting that is clear, objective and comparable, balancing user needs and preparer costs. It also aims to reduce the burden on preparers by simplifying the requirements and ensuring the information they are required to provide is useful to them and their stakeholders.