Financial Reporting

Reporting for Registered Charities

From years ending 31 March 2016 onwards, all registered charities have to produce Financial Statements in accordance with Financial Reporting Standards issued by the External Reporting Board.

If your financial year does not end on 31 March, your Financial Statements have to be compliant with the standards at the first end of financial year after 31 March 2016. For example if your financial year ends in December, your reports first have to be compliant for the year ending 31 December 2016.

Which standards you have to apply depends on a Tier you qualify for, and that you opt for. The Tier system is hierarchical, meaning that Tier 1 is the default reporting Tier, unless you qualify and opt for a lower Tier.

Tier Qualifying conditions Financial Reporting Standards
Tier 1 Default PBE IPSAS
Tier 2 Annual expenditure below $20m PBE IPSAS
Tier 3 Annual operating expenditure below $2m PBE SFR A (NFP)
Tier 4 Annual operating expenditure below $125,000 PBE SFR C (NFP)

In addition, organisations must not be ‘publicly accountable’ when opting for a lower Tier than¬† Tier 1. ‘Public accountability’ is defined through being either a publicly listed (sharemarket)¬† entity, or an entity holding significant funds on someone else’s behalf as its primary business (such as banks, insurance providers, brokers etc). It is very rare for a not-for-profit to be ‘publicly accountable’ as defined in law.

An organisation is not automatically slotted into a Tier depending on their operating expenses or annual income. Which Tier is ‘right’ for you depends on these and other considerations:

  • Compliance costs. The lowest Tier does not necessarily create the least compliance costs.
  • Internal accounting capability.
  • Demands of external users, such as funders or other stakeholders.
  • Confidentiality considerations (Tier 3 and 4 require much more detailed disclosures which may impinge on privacy).
  • Audit costs (the Statement of Service Performance required in some tiers may add to audit bills).

See here (pdf) for a brief guide to choosing your Tier if you are a small (<2m) registered Charity.


Both the Charities web site and the XRB web site have authoritative information about the financial reporting requirements.

Advice from CCA regarding the new standards is available through our monthly e-newsletter, through contacting us and through this web site.

A CCA leaflet on the additional information that is needed compared to previous years can be accessed here:

Tier 4: Tier 4 – Additional Disclosures

All other Tiers: Tier 1-3 – Additional Disclosures

CCA has three general recommendations at this stage:

  • If you are using an accountant, check with them if they are conversant with the new standards and ask for an estimate of what it will cost to produce compliant statements.
  • It is not usually necessary to change your day-to-day bookkeeping or accounting systems. Your financial systems’ primary role is to produce sound financial information for internal decision-making.
  • If you are presently producing accrual-based Financial Statements but qualify for Tier 4 reporting (under $125,000 annual operating expenses) it is probably worthwhile changing. See CCA’s information sheet for such organisations.