IFR4NPO Consultation Paper 2021
The International Financial Reporting for Non-Profit Organisations (IFR4NPO) project is a major $4.5m multi-year initiative to develop the world’s first internationally applicable Financial Reporting guidance for such organisations.
The project is jointly co-ordinated by Humentum and CIPFA, the Chartered Institute of Public Finance and Accountancy. As a firm we have supported the development of such guidance for many years and are pleased to now be contributing to the project through membership of the Practitioner Advisory Group, one of only two UK accountancy firms that are involved. We believe this to be a very important piece of work for charities that work on an international basis. Further details can be found here https://www.ifr4npo.org/
After launching in July 2019 the project is currently undertaking a consultation stage during 2021, aims to publish an exposure draft in 2023 and issue the final guidance in 2025. The consultation paper was issued in early 2021 and can be found here https://www.ifr4npo.org/access-consultation-paper/
The current consultation is split into two initial stages – the first Part addressed the broad NPO financial reporting landscape and required responses by the end of July 2021. This initial stage considered fundamental framework areas such as what are NPOs, who are their stakeholders and what are their needs. It also considered the merits of financial and narrative reporting, including consideration of other reporting areas such achievement of objectives, economy/ efficiency and effectiveness, and long-term financial health. MHA agreed with most of the proposals including the use of the existing international financial reporting regime as an appropriate base point.
Part 2 of the consultation addresses specific financial reporting issues and responses are required by 24 September 2021. As this Part will affect those that prepare and audit NPO financial statements, we would encourage all our clients and contacts to examine the proposals and to respond accordingly. Details of how to respond can be found here https://www.ifr4npo.org/consultation-paper-response/ The areas considered include the reporting entity, accounting for incoming resources, accounting for outgoing resources, accounting for financial and non-financial assets, and presentation, and the scope and content of financial reports.
Download our response to Part 1 of the consultation here