Changes to charity reporting requirements

There are three main changes to the financial reporting obligations of registered charities on the horizon, some taking effect as of 1 July 2022.

Changes to reporting thresholds

All charities registered with the Australian Charities and Not-for-profits Commission (ACNC) are obligated to submit an Annual Information Statement, providing information about the charity, its activities and basic financial information.

In addition to the Annual Information Statement, charities that are classified as medium or large are required to submit a financial report. This is not mandatory for small charities.

ACNC reporting thresholds for each charity category will increase from 1 July 2022 (2021-22 financial year reporting), in order to relieve reporting burdens on many charities. ?

• Small charities will increase (from under $250,000) to under $500,000 annual revenue.
• Medium charities will increase (from $250,000 but under $1 million) to $500,000 or more but under $3 million annual revenue.
• Large charities will increase (from $1 million or more) to $3 million or more.

The ACNC estimates that as a result around 2,500 charities will no longer be required to submit annual financial reports, and around 2,700 charities will no longer be required to submit audited financial reports.

Changes to reporting for large charities

If large charities have two or more key management personnel, they will be required to report remuneration paid to Responsible Persons (eg directors) and senior executives on an aggregated basis in their Annual Information Statement from 2022.

Changes to reporting for all charities

To increase financial transparency of transactions that pose risks of conflicts of interest, taking effect from 1 July 2023 (2022-23 financial year reporting) all charities will be required to report related party transactions in their Annual Information Statements.

A related party transaction means any transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.

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