Proposed new accounting regulations will affect ALL charities
NICVA would urge all charities, especially those that fall below or in and around the £100,000 to £250,000 income bracket, to read our briefing paper on this consultation and to respond to the consultation.
SUMMARY OF PROPOSED NEW RULES AND THE DSD's PREFERRED OPTIONS
- Charities with an income of £100,000 or more will have to prepare accounts on the accruals basis (same as company accounts) which is a major change and cost from the basic receipts and payments basis (one of two Options for consultation).
- All charities will be required to have their accounts externally scrutinised (one of three options for consultation):
- Charities with an income under £100,000 – an independent examination by someone that the charity trustees believe has the requisite ability and experience
- Charities with an income between £100,000 and £500,000 – an independent examination by a qualified person
- Charities with an income over £500,000 – a full audit.
- The Charities SORP will become mandatory for all charities that prepare their accounts on an accruals basis.
- A new Trustee Annual Report must be completed by all charities detailing activities, achievements and a review of the charity’s financial position.
- Group accounts must be prepared by charities which have subsidiaries if their combined income is £500,000 or more.
NICVA recognises that detailed regulations are needed however disagrees with the Department for Social Development's preferred options regarding income thresholds. NICVA asks that the thresholds be increased as follows:
- increase the income threshold for the preparation of receipts and payments accounts to £250,000
- increase the threshold at which an independent examination is required by a qualified person for annual income of between £250,000- £500,000
Places are still available at the consultation seminar on 25 September, please note that this is not solely for those working in finance, it is for anyone who is involved in the running of a charity - Charity Trustees/Directors/Committee members - or for those that have an advisory role with charities.
Please download the NICVA briefing paper attached and for full details of the consultation, please visit https://www.dsdni.gov.uk/consultations/accounting-and-reporting-by-charities