With Australian financial reporting poised for significant upheaval, Nick Walker, partner in audit and assurance at HLB Mann Judd, explains what the introduction of new accounting standards means from a financial report user’s perspective.
The financial operating results and the balance sheets (statements of financial position) of not-for-profit entities will potentially undergo significant changes for financial reporting periods commencing on or after 1 January 2019 (i.e. the year ended 30 June 2020 or the year ended 31 December 2019).
While those responsible for the financial reporting of not-for-profit entities will no doubt be aware of the significance of AASB 1058 Income of Not-for-Profit Entities, AASB 15 Revenue from Contracts with Customers and AASB 16 Leases, the concepts that these standards will introduce, and their impact, may still be difficult for executive management and boards/committees and their applicable subcommittees to fully grasp.
This may make it difficult for executive management and boards to effectively communicate the financial operating results and position to members and other key users of the financial statements such as funding bodies and financial institutions.
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