In November, IFR4NPO released an Exposure Draft for the development of the first International Non-Profit Accounting Guidance (INPAG) with a mission to improve clarity and consistency of Non-profit Organisation (NPO) financial reports.
Since 2019, Humentum and CIPFA have been partnering to develop guidance for how NPOs prepare their annual audited accounts. The first Exposure Draft (ED1), launched in November 2022, was developed with input from the project’s Technical and Practitioner Advisory Groups with volunteer members from 25 countries, bringing their expertise in the fields of standard setting, auditing, reporting, funding and academia.
“Only a few countries have bespoke standards for non-profits. International guidance will drive equity, efficiency, accountability, and ultimately trust in this vital sector. This is a key moment, when the diverse stakeholders of non-profits around the world get to share their opinions and shape the future of financial reporting in the sector.” Tim Boyes-Watson, Global Director, Influence & Initiatives, Humentum.
Launch of the first INPAG exposure draft
To mark the launch of ED1, the Charity Community held a webinar where ICAEW member and IFR4NPO Project Director, Samantha Musoke, provided an update on the project and an insight into what ED1 covers, including a first look at the proposed financial statements and narrative reporting.
Charities in the UK will continue to apply the Charities SORP for accruals accounts but they may be impacted by the guidance if they operate abroad and their international branches and offices adopt the INPAG. In the longer term, it is also expected that there will be cross-fertilisation between the INPAG and future Charities SORPs.
A more harmonised donor reporting regime
Narrative reporting under INPAG
Project timeline
The project is now in its second phase following the completion of the consultation process (2019-2021). The current development phase is expected to complete in 2024.
ED1 is the first of three exposure drafts, each followed by a four-month consultation period. It addresses four main topics that are important for the framing and context of INPAG:
- A description of Non-Profit Organisations: Broad characteristics and indicators
- A framework for INPAG: Concepts and pervasive principles
- Financial statements presentation, including fund accounting
- Narrative reporting: Commentary and reporting
INPAG is expected to launch in 2025 following the next rounds of exposure drafts which will focus on accounting and presentation aspects.
ED1 is open until 31 March 2023. Find out more and share your view on INPAG Exposure Draft 1.
For more information:
- www.ifr4npo.org subscribe for newsletter updates
- www.ifr4npo.org/exposure-draft
- www.ifr4npo.org/accounting-issues includes resources exploring each of the four topics
- For further information, please contact info@ifr4npo.org
Access the recording of the ICAEW webinar here: