The work the AASB is undertaking on the recognition of income, reducing the disclosure burden and service performance reporting (further details are available at www.aasb.gov.au) demonstrates that the AASB regards the NFP sector as a significant sector in the Australian economy that warrants particular attention.
1. Accounting for Income of NFP Entities
The AASB has been examining when an NFP should be required to book income. Some of the proposals were not supported by the submissions. In light of this, the AASB is now working on a different approach, based on the principles being developed by the IASB in its work on a Standard for Revenue from Contracts with Customers, modified where necessary for NFP-specific issues. This approach is being referred to as a ‘performance obligations’ approach, whereby income is booked as being earned when performance obligations are fulfilled.
Under this approach, in some instances the income would be booked later than under AASB 1004. Many practitioners would regard such an outcome as providing a more relevant depiction of the NFP’s income, and therefore its performance and financial position.
2. Disclosures by NFPs
The AASB has issued AASB 1053 Application of Tiers of Australian Accounting Standards. Most importantly it substantially reduces disclosure requirements for NFPs. In addition to the second tier initiative, the AASB plans to further examine opportunities for reducing the disclosure burden on NFPs. In addition to the second tier initiative, the AASB plans to further examine opportunities for reducing the disclosure burden on NFPs.
3. Service Performance Reporting
This project is examining issues related to the reporting of inputs, outputs, outcomes and performance measures – not just financial information. This project is examining issues related to the reporting of inputs, outputs, outcomes and performance measures – not just financial information. The AASB is looking at what role it should play in specifying mandatory or non-mandatory non-financial disclosures that would provide input for decision makers.
To date a significant amount of research has been done on existing service performance reporting in various jurisdictions. This research provides a basis for benchmarking the development of principles for service performance reporting.
From 1 July 2012 many of the functions currently undertaken by the Australian Taxation Office (ATO) in relation to the administration of charitable endorsement will be undertaken by the ACNC. In preparation for this transition the ATO is encouraging all charities and NFP entities to ensure that their details are up to date, particularly their contact details.
When the ACNC starts operation on 1 July 2012, the responsibility for determining charitable status will move from the ATO to the ACNC. Those entities currently endorsed as charities by the ATO will become registered by the ACNC.
This will be a seamless transition, but will be greatly assisted if the details of entities are as up-to-date as possible.
To help the ATO protect your entity’s privacy and provide office bearers with access to the information they need to perform their duties, please notify the ATO of any changes to your entity’s registration details.
If you are an authorised contact person that the ATO has on its records for your entity’s ABN, or would like to check whether you are the contact person, you can phone the ATO on 1300 130 248. If you are not an authorised contact person, you will need to ask for a Change of registration details form (NAT 2943).
ATO are introducing a new income tax schedule for the 2012 financial year: International dealings schedule (IDS) 2012.
The IDS 2012 will replace the previous Schedule 25A and Thin capitalisation schedule. It gives you the opportunity to complete questions that better align with:
- ATO’s risk management processes
- your record-keeping and business systems
- projects such as the standard business reporting and differentiated returns projects.
You will need to complete an IDS 2012 if you operate a company, partnership or trust that has international dealings, some of which have thresholds.
The IDS 2012 will capture data about international transactions that will be used to:
- better inform our international risk assessment and mitigation strategies
- allow more targeted assistance
- better support to compliance activities and help in reducing compliance costs.
An extensive consultation process was undertaken during 2009-10 with financial services bodies and National Tax Liaison Group (NTLG) representatives to co-design a pilot for the new schedule for the financial services industry. The current draft of the new IDS 2012 has been developed from that consultation, feedback and the 2009-10 pilot program.
ATO are currently consulting with various stakeholders, including a working group of representatives from the NTLG – International sub-committee to finalise the new IDS 2012 and its supporting instructions.
The final version of the IDS 2012 and supporting instructions will be available on ATO’s website in early 2012.
On 3 November 2011 legislation was enacted that extends the exemption from fringe benefits tax (FBT) for travel between home and work sites for fly-in/fly-out employees working overseas and their employers (subject to certain conditions being met).
ATO accepted tax returns as lodged during the period up until enactment of the legislation on 3 November 2011.
Employers (with a sufficient connection to Australia) employing Australian resident taxpayers in a remote area overseas under a fly-in/fly-out arrangement will need to review their positions:
- Those taxpayers who have not paid FBT, which accords with the new law, do not need to do anything more.
- Those taxpayers who have paid FBT can seek amendments and if a reduction in liability results, interest on overpayment will be paid.
With regards to Australian resident taxpayers who are employed in a remote area overseas under a fly-in/fly-out arrangement, these taxpayers will need to review their positions:
- Those taxpayers who have not received a payment summary from their employer, and consequently have not reported reportable fringe benefits on their individual tax returns, do not need to do anything more.
- Those taxpayers who have received a payment summary from their employer, and have reported reportable fringe benefits on their individual tax returns, can request us to amend their reportable fringe benefits.
The Commissioner of Taxation has assessed the following locations to be remote or non-remote.
| Remote overseas locations |
Date assessed |
| Nhemba, Tete, Mozambique |
November 2011 |
| Nunavut, Canada |
November 2011 |
| Tengiz, Kazakhstan |
November 2011 |
| Goro, New Caledonia |
November 2011 |
| Aasiaat, Greenland |
November 2011 |
| Non-remote overseas locations |
Date assessed |
| Ulaanbaatar, Mongolia |
November 2011 |
| Valencia, Venezuela |
November 2011 |
| Riyadh, Saudi Arabia |
November 2011 |
| Dubai, United Arab Emirates |
November 2011 |
| Nanchang, China |
November 2011 |
| Gurgaon, India |
November 2011 |
| Khartoum, Sudan |
November 2011 |
| Honiara, Solomon Islands |
November 2011 |
| Singapore, Singapore |
November 2011 |
| Please note this listing will be updated based on private ruling decisions that an area is remote or non-remote. |
