Financial Reporting

Reporting for Registered Charities

New Zealand has the toughest reporting environment for charities in the world. It is also the only country in the world where the way charities report their financial information, and even some of their non-financial information, is determined by the regulator of financial markets (External Reporting Board), not the regulator of Charities.

Have to comply with professional Accounting Standards? Financial report content regulated by Annual expenditure above which  accrual accounting has to be used Annual expenditure below which charities do not have to file a financial report. Annual expenditure above which accounts must be reviewed/audited


UK No Charities Commission $500,000 (250,000 pounds)
0 $2m
Australia No Charites/NFP Commission $260,000 ($A 250,000)
$260,000 $260,000
Canada No Inland Revenue Not mandatory 0 Not required
New Zealand Yes External Reporting Board $125,000 0 $500,000


New Zealand Charities have to comply with accounting standards. Which one applies to you depends on the 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.