Developing and issuing standards

An overview of the  different financial reporting standards which exist for NFPs and the context in which they are developed.

Terms and conditions

All rights, including copyright and other intellectual property rights, in and to this website are owned by or licensed to CIPFA.

You may use, download and print content on the website solely for your own personal use or internal business purposes. Other than for your own personal use or internal business purposes, you may not without our prior written consent copy, reproduce, use or otherwise deal with any content on the website.

Full terms and conditions are available at www.cipfa.org/terms-and-conditions.



Australia

Process of developing and issuing standards for NFPs

Does the jurisdiction have a formal process for the development of standards and guidance for NFPs?

Yes.

NFP Standards are developed through the AASB’s extensive due process, as the AASB Standards apply generally to all types of entities.


Are standards for NFPs incorporated into law or regulation?

Yes.

The AASB issues Standards under delegated legislative power under the Corporations Act 2001.  The States and Territories then mandate financial reporting for regulated entities (where applicable) following those Accounting Standards as they see fit.


Canada

Process of developing and issuing standards for NFPs

Does the jurisdiction have a formal process for the development of standards and guidance for NFPs?

Yes.

The Accounting Standards Board (AcSB) establishes accounting standards for use by all Canadian entities outside the public sector. The Accounting Standards Board (AcSB) follows a rigorous set of procedures, known as due process, in developing and adopting standards. The due process procedures are critical in maintaining the objectivity of the standard-setting process and the quality of the output, and are documented in the AcSB Due Process Handbook.

The Public Sector Accounting Board (PSAB) establishes accounting standards for all public sector entities.  PSAB follows a rigorous consultative procedure in the development and issuance of accounting standards and statements of recommended practice for the public sector.  The emphasis on due process is critical in maintenance of the standard-setting process.  PSAB’s due process is described in its comprehensive Due Process Procedures document.


Are standards for NFPs incorporated into law or regulation?

No, not directly.

The law requires the application of Canadian GAAP such that when new standards and amendments are issued by the AcSB, they are included in the law given the reference to GAAP.

In the public sector, often there is legislation or regulation in place requiring the CPA Canada Public Sector Accounting Handbook to be applied.


Colombia

Process of developing and issuing standards for NFPs

Does the jurisdiction have a formal process for the development of standards and guidance for NFPs?

Yes.

The CTCP has the authority to issue guidance.


Are standards for NFPs incorporated into law or regulation?

Not answered.


France

Process of developing and issuing standards for NFPs

Does the jurisdiction have a formal process for the development of standards and guidance for NFPs?

Yes.

The accounting standards are updated by ANC as a result of legal or contextual evolutions.


Are standards for NFPs incorporated into law or regulation?

Yes.

The ANC standards are regulations. Therefore the NFP must apply them.

The ANC’s regulations are endorsed by an order of the Finance Minister, Justice Minister and Economy Minister published in the Official Journal of the French Republic.


New Zealand

Process of developing and issuing standards for NFPs

Does the jurisdiction have a formal process for the development of standards and guidance for NFPs?

Yes.

The New Zealand Accounting Standards Board, a sub-board of the External Reporting Board (XRB), is responsible for developing and issuing accounting standards for entities in New Zealand with statutory requirements to financial statements.

The XRB Board has established a minimum set of due process requirements to be followed by the NZASB in undertaking its responsibilities.

The NZASB is required to obtain a certificate signed by the XRB Board Chairman, or in his/her absence another XRB Member so designated, authorising a standard be issued (or amended or revoked). 


Are standards for NFPs incorporated into law or regulation?

Yes.

After an accounting standard is approved by the NZASB/XRB, a notice is included in the Government Gazette. The Standard takes effect 28 days after being Gazetted.


United Kingdom

Process of developing and issuing standards for NFPs

Does the jurisdiction have a formal process for the development of standards and guidance for NFPs?

Yes.

The Charities SORP is jointly developed by the Charity Commission and the Office of the Scottish Charity Regulator, who are authorised as the SORP-making body by the UK Financial Reporting Council (FRC). The SORP-making body received advice from a committee of sector-based experts.

The framework is approved for issue by the FRC Board, who issue a ‘Statement on the Charities SORP’. This includes a statement which confirms the SORP requirements do not conflict with the requirements or principles of the FRC financial reporting standards.

The SORP-making board are required to follow a due process in developing or revising the SORP. This includes publically consulting on draft versions of the SORP, and proactively seeking the views of a wide range of stakeholders when revising or developing the SORP.


Are standards for NFPs incorporated into law or regulation?

Yes.

UK charity law requires accounts prepared on an accruals basis to be prepared in accordance with the Charities SORP.

For those charities which are companies and apply company law, compliance with the Charities SORP is adopted on the basis that this is necessary for the accounts to give a ‘true and fair’ view.

USA

Process of developing and issuing standards for NFPs

Does the jurisdiction have a formal process for the development of standards and guidance for NFPs?

Not answered.


Are standards for NFPs incorporated into law or regulation?

No, however, certain regulatory bodies refer to US GAAP (such as the IRS in its instructions to Form 990).

NFPs may be required to apply certain accounting standards or a specific basis of accounting through the marketplace. For example, the financial reporting requirements may be imposed by a user of the financial statements involved in lending to the NFP. A state charity regulator may also impose a specific type of accounting to be used in an annual filing required by the jurisdiction.