Financial Reporting Requirements

"Up until now, there have been no minimum standards for the content or the quality of registered charity financial statements. However, registered charities now need to prepare financial statements in line with new reporting standards. The new reporting standards came into effect on 1 April 2015, which means they will only apply to a charity’s first full financial year that starts on or after 1 April 2015 (so for years ending on or after 31 March 2016).

Charities Services has produced a short video which provides a brief overview of the new reporting standards (below). The reporting standards are set by the External Reporting Board (XRB), an independent Crown Entity. The XRB, in conjunction with Charities Services, has conducted a number of public presentations on the new reporting standards.

Four different reporting tiers have been developed, and this allows smaller registered charities to prepare financial statements on a simplified basis. It is expected that about 97% of registered charities will be able to use the simplified standards. All charities default into tier 1, but may choose to report in another tier if they meet certain criteria. The tier that a charity reports under is determined by the annual expenses or operating payments for its previous two financial years. The criteria for each tier are shown below."