The Institute of Chartered Accountants of India (ICAI) has released the Exposure Draft of the International Non-Profit Accounting Guidance.
“Exposure Draft CIPFA/ED/2022/1 International Non-Profit Accounting Guidance is published by the Chartered Institute of Public Finance and Accountancy (CIPFA) for comment only. Comments need to be received by 31 March 2023 and should be submitted by email to ifr4npo@cipfa.org or online at www.ifr4npo.org/have-your-say,” ICAI said.
The Guidance aims at developing the first ever international financial reporting guidance for Non-Profit Organisations (NPOs).
The IFR4NPO project sought views, via a Consultation Paper issued in January 2021, on the proposal that the IFRS for SMEs Accounting Standard be used as the basis for a single set of authoritative guidance for NPOs. Having taken account of the feedback from the consultation, adaptations to IFRS for SMEs are being proposed to create International Non-Profit Accounting Guidance (INPAG) as NPO specific financial reporting guidance.
The INPAG Secretariat will consider feedback on this Exposure Draft in the development of the remaining two Exposure Drafts that will collectively comprise INPAG.
In many countries, Non-Profit Organisations (NPOs) have no guidance or frameworks to support the preparation of financial statements. These are crucial for transparency, accountability and decision making. Funding organisations have filled this void by developing their own reporting requirements for NPOs.
While all have their merits, the variety of different requirements can create a heavy burden on the very organisations they want to support. Private and public sector entities and their stakeholders have benefited greatly from the development and use of international standards since the 1970s. In a 2014 international survey, which had more than 600 responses from 179 countries, the majority of respondents agreed or strongly agreed that an international accounting standard, or guidance specifically for NPOs, would be useful.
A consultation paper was issued in January 2021, setting out proposals to develop high-quality, trusted, internationally-recognised financial reporting guidance for NPOs (now called INPAG). It sought feedback on a number of proposals including priority topics. There was overwhelming support for the development of INPAG and the proposals set out in the document.
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