The Accounting Standards
Council (ASC) is seeking views from the public and the charity
sector on the draft accounting proposals and reporting requirements
pertaining to charities and Institutions of a Public Character
2. The ASC is established in
November 2007 to take over the task of prescribing accounting
standards for companies from the Council on Corporate Disclosure
and Governance (CCDG). The ASC is also responsible for prescribing
accounting standards for charities, co-operatives and societies.
A Committee for Charities is set up under the ASC to prescribe
accounting standards for charities and IPCs. Moving forward,
all registered charities and IPCs, regardless of whether they
are legally constituted as Companies Limited by Guarantee
under the Companies Act or as societies under the Societies
Act, or trusts under the Trustees Act, will only have to comply
with the accounting standards for charities and IPCs issued
SCOPE OF THE CONSULTATION EXERCISE
3. In drawing up these proposals, the ASC Committee for Charities is guided by the following principles:
The accounting standards should
provide transparent and accountable financial reporting.
This means that there is a need for greater disclosure
to help increase the level of transparency and accountability
to the donating public, and enhance public confidence
in the charity sector.
The accounting standards should
not be ”one-size-fits-all”, but be stratified,
with larger charities and IPCs, and those that raise
funds from the public (typically IPCs) subjected to
more stringent reporting requirements.
4. The key proposals include
using income or expenditure (whichever is higher) as a basis
to determine the size of the charity; defining the basis for
classifying large and nonlarge charities/IPCs; specifying
the accounting standards and reporting format to be complied
by large and non-large charities/IPCs; raising the threshold
for statutory audit for charities from the current income
or expenditure of $250,000 to $500,000; mandating all charities
and IPCs to prepare accounts using accrual basis; and imposing
additional information to be disclosed in the annual report
of charities/IPCs. In addition, the ASC Committee for Charities
also proposed a building depreciation policy to provide guidance
to charities/IPCs and their auditors.
5. Mr Low Puk Yeong, Commissioner
of Charities, who is also the Chairman of the ASC Committee
for Charities said that, "The ASC Committee for Charities
has taken into consideration feedback given by charity sector,
auditors and donating public when drafting these proposals.
These draft proposals reflect our aspirations to promote greater
transparency and accountability of the charity sector by improving
the standards of financial accounting and reporting, while
at the same time also ease the burden on smaller charities/IPCs,
particularly in the area of statutory audits."
PERIOD OF CONSULTATION
6. The ASC Committee for Charities
will be holding focus group discussions with charities and
IPCs to seek their views. The public can also comment on the
draft proposals from 4 August 2008 till 7 September 2008 via
the following portals:
7. Please send us your comments, by:
We would encourage comments
through email as they will reach us faster and speed up the
process of consideration.
DOCUMENTS TO DOWNLOAD
8. For your convenience, the
relevant documents relating to this public consultation exercise
can be downloaded for further reference.