User requirements for not-for-profit entity financial reporting: an international comparison

This study investigates the not-for-profit (NFP) external financial reporting regulatory environments of the US, the UK, Canada and New Zealand and compares them with that of Australia. Each of the regulatory environments reviewed has some form of separate guidance for NFP entities or a subgroup, such as charities. In contrast, Australia has one set of standards for all entities with only minimal separate guidance for NFP entities. There are differences between the definitions of a NFP entity included in the AIFRS and the guidance from other regulatory environments. Further, the definition in Australian standards is difficult to operationalize. The research identifies ten types of information that other regulatory environments consider useful to users. Four issues are supported by both public-sector and charity literature: fund accounting, budget information, performance information and, to a lesser extent, disclosure of non-reciprocal transfers. Three issues are supported by the charity literature only: alternative presentation of income and expenses and changes in net assets, disclosure of related parties and related-party transactions, and additional disclosure of descriptive information.