The Australian Charities and Not-for-profits Commission (ACNC) wants a dedicated accounting standard that applies to the not-for-profit sector with clear guidelines that set out how charities report different income and expenses.
ACNC commissioner Susan Pascoe AM said administration cost ratios as a measure of charity effectiveness were particularly flawed due to the inconsistency in accounting practices used by not-for-profit organisations.
“Other Commonwealth jurisdictions already have accounting standards specifically for not-for-profit organisations, and we will continue to advocate for their introduction here in Australia,” Pascoe said.
The Australian Accounting Standards Board (AASB) said it was currently in discussions with the ACNC and others on proposed changes to the way not-for-profits recognise income in financial reporting.
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