The first ever draft guidance on international reporting standards for not-profit organisations has been published as part of a project to develop global rules for charity accounting.
Humentum and the Chartered Institute of Public Finance and Accountancy (CIPFA) announced the release of the International Non-Profit Accounting Guidance, Exposure Draft 1 (INPAG ED1) at the World Congress of Accountants in India earlier this week.
The guidance is the result of the International Financial Reporting for Non-Profit Organisations (IFR4NPO), a five-year joint initiative launched by both organisations in 2019.
INPAG aims to provide “greater clarity and consistency” for voluntary organisations on the financial reports they prepare.
The final guidance will consist of three parts that will each be followed by a four-month consultation period. The last EDs are expected to be released next year, with the full guidance due to be published in 2025.
ED1 looks at four main topics which include:
• Describing Non-Profit Organisations / Reporting entity.
• INPAG Framework.
• Financial statement presentation.
• Narrative reporting.
Karen Sanderson, CIPFA IFR4NPO project director, said: “International standards have brought great benefits to the for-profit and public sectors in recent decades. [The] launch marks a crucial milestone on the journey to NPO-specific guidance developed by the sector for the sector.”
Tim Boyes-Watson, global director of influence & initiatives at Humentum, added: “Only a few countries have bespoke standards for non-profits. International guidance will drive equity, efficiency, accountability, and ultimately trust in this vital sector. This is a key moment, when the diverse stakeholders of non-profits around the world get to share their opinions and shape the future of financial reporting in the sector.”
A consultation on the first part of the draft guidance is open until 31 March 2023.
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