NFP service performance reporting exposure draft

In a first, the Australian Accounting Standards Board (AASB) is proposing that public and private NFPs report on how well they are performing as well as their financial statements.  Exposure draft 270 ‘Reporting Service Performance Information’ proposes mandatory reporting by NFPs of service-performance information.

Service-performance information may be defined as material that tells users about the delivery of goods and services that intend to make a positive impact on society or segments of society.

The draft was written in response to a perception that financial-reporting requirements alone did not sufficiently address non-financial information that users required to understand how well their contributions were being used.  The AASB considers that service-performance information helps users of general-purpose financial statements to assess an entity’s performance.

Exposure draft 270 proposes that service-performance information be reported at least annually about:

  •  An entity’s service-performance objectives
  • Key outputs, including the inputs used to produce them
  • Any outcomes an entity is seeking to influence, and
  • An entity’s efficiency and effectiveness in achieving its service-performance objectives.

The draft does not specify whether the information should be audited; this will be a matter for each entity’s regulator.

At the very least, NFPs should be aware of the proposals and monitor developments.  Eventually these ideas are bound to affect financial reporting and communications with stakeholders.  Be proactive, and let the AASB know your views by 12 February.  More views means a better standard for everyone.

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