Annual Information Statement (AIS) time will be coming up from 1 July for charities which have a financial year ending 30 June. Here are a few new things to watch out for and prepare for this year’s and next year’s AIS:
1. Size matters
The old thresholds for small, medium and large have changed. Your organisation is now small if revenue is less than $500k, medium if it is $500k to under $3m, and large if it is $3m or more. Moving from a larger category to a smaller one may have an impact on your reporting obligations.
2. Key Management Personnel Remuneration
In your next AIS (the 2022 AIS), large charities and some medium charities (other than basic religious charities which don’t file their Accounts with the ACNC) may be required to disclose the aggregated remuneration paid to all key management personnel. Disclosure of such information is also likely to be required in the accounts of such charities. The ACNC has issued some guidance in this regard. However, the detail of the requirements can be complex, so it would be prudent to work with your auditor or external accountants to understand how the calculations and disclosure work.
3. Transactions with Related Parties
All charities (other than basic religious charities which don’t file their Accounts with the ACNC) will need to report any material related party dealings in their 2023 AIS, and medium and large charities will also have to note them in their Accounts. These AIS reporting obligations don’t apply for your 2022 AIS, but they will apply for your financial year ending in 2023. This means you will need to be compiling details of any related party dealings from the start of your 2022/23 financial year. For example, if your financial year is 1 July to 30 June, you will need to start keeping records of related party dealings from 1 July 2022, so that the relevant information can go into your AIS to be filed after 30 June 2023.
The ACNC has developed a template for a register of related party dealings (.doc download) which would be a great starting place. The ACNC has also provided some guidance on how to identify material related party transactions.
Interestingly, the requirement to keep records about related party dealings and publish them has been a requirement of the CMA Standards Council since its outset. It’s good to see the ACNC catching up!