Darryl Swindells, from HLB Mann Judd Sydney, reflects on how new accounting rules can change how, and when, not for profits recognise income.
These new rules may significantly change how your organisation recognises income, and when it recognises that income.
If you have any leases, or arrangements similar to leases, the new rules will definitely change your balance sheets, bringing on possibly significant assets and liabilities.
If you have a June year end, these rules apply from 1 July 2019, which is only three months away. If you have a December year end, these rules have been in place since 1 January 2019.
For the new income accounting standard, an analysis needs to be made of every source of income, putting it through a multistep analysis to be able to determine how and when to recognise income, and the minimum income to be recognised.
For the new leases standard, the first and maybe most difficult job is to obtain information for every lease or similar arrangement that your organisation has. NFP’s are telling us that this is not an easy exercise.
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