CA ANZ and CPA Australia have lodged a joint submission to the third and final Exposure Draft from the IFR4NPO project that will produce global reporting guidance for not-for-profits. The guidance, known as the International Non-Profit Accounting Guidance (INPAG), is being developed in response to a globally recognised need for comprehensive, consistent, and appropriate reporting for this sector.

ED 3 covers the remaining sections of INPAG which is based on the IFRS for SMEs standard i.e., those topics not covered during ED 1 (covering framing) and ED 2 (dealing with recognition and measurement). It includes specifically drafted chapters on grant reporting and fund accounting and specimen financial statements that illustrate the outcomes of applying the INPAG guidance. ED 3 also includes material on other reporting topics such as fair value, business combinations, leases, impairment and related parties.

Our submission is of the view that most of the proposals are fit for purpose and will result in the production of consistent and meaningful financial information. However, it expresses the view that some aspects, such as those dealing with fair value measurement and fund accounting, need further explanation if they are to be implemented in a cost-effective manner.

The submission also continues to emphasise the need for educational materials and ongoing support for the global implementation of the INPAG since it represents a significant step forward for many entities with limited skills and resources. It also encouraged the IFR4NPO’s work with donor groups and software suppliers to improve systems, processes and documentation as these efforts will also strengthen the ability of the INPAG to improve the quality of NFP reporting globally.

The final version of the INPAG is due for release in mid-2025.