For the annual reporting period from 1 July 2023, the Australian Charities and Not-for-profits Commission (ACNC) has mandated that all registered charities (except for Basic Religious Charities) to disclose related party transactions in their annual financial reports. This measure promotes transparency and greater accountability to the communities.
Related Party Transactions
The charities related party transactions reporting differed depending on the charity size.
For medium and large charities, AASB 124 Related Party Disclosures will apply. For small charities, ACNC has adopted a simplified related party definition. For details, refer to ACNC website.
Practical steps for charities
Maintaining good records such as the use of a register to record related party transactions, will help charities to prepare related party transactions reporting (refer ACNC website for example register). Reporting charities need to act now to establish a register of related party transactions and work to gather the relevant information to support the Annual Information Statement.
AASB 124 effectively defines all related party transactions as material (i.e., materiality for related party transactions is effectively $1). Applying the materiality considerations from AASB 124 results in needing to consider disclosure for all transactions between the reporting charity and the entities governing board (i.e., all directors) and other related parties.
How we can help
Navigating related party transactions reporting can entail complexities and require an understanding of the accounting standard. At Mazars, we have the knowledge, expertise and passion to assist not-for-profit entities with complying with AASB 124. If you require assistance with your annual reporting requirements please contact one of our specialists via the form below or on:
Author: Kailee Ng, Darren Leong
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