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- August 2010
- NSW Inc Associations – Legislation updated
NSW Inc Associations – Legislation updated
- By Rob Mackay
- Published 1/09/2010
- August 2010
- Unrated
The New South Wales Associations Incorporation Act 2009 (the Act) and Associations Incorporation Regulation 2010 commenced from 1 July 2010, and the associated reforms are expected to assist more than 35,000 associations incorporated in New South Wales to operate more effectively and to make it easier for them to manage their affairs. It is not expected that the day–to–day procedures and operations of associations will be directly impacted. The key financial reporting changes introduce a tiered financial reporting framework.
Tier 1
A tier 1 association is an association with gross annual receipts (excluding GST) of more than $250,000, or current assets (i.e. assets other than real property or depreciable assets) of more than $500,000.
Tier 1 associations are required to have their annual financial statements audited and are required to lodge a copy of those audited financial statements with NSW Fair Trading (unless exempted), within the earlier of one month after the AGM or seven months after year end.
A Tier 1 association can be exempted where gross receipts for the financial year were negligible, but where current assets exceed the threshold ($500,000).
The financial statements of a Tier 1 association must be prepared in accordance with Australian Accounting Standards and include details of any mortgages, charges and other securities affecting any property owned by the association. It must also include a separate income and expenditure statement and balance sheet for each trust for which the association is the trustee.
The financial statements must be audited in accordance with Australian Auditing Standards. The audit may be carried out by either a registered company auditor or any person holding a certificate of public practice with a professional accounting body in Australia.
Tier 2
A Tier 2 association (i.e. all associations not captured in the Tier 1 category) is required to prepare financial statements which give a true and fair view of the associations operations, and which include:
Application Date
These new requirements apply for those associations whose financial years end after 30 June 2010. For 30 June 2010 year ends, the requirements of the Associations Incorporation Act 1984 shall continue to apply.
Contact
Tier 1
A tier 1 association is an association with gross annual receipts (excluding GST) of more than $250,000, or current assets (i.e. assets other than real property or depreciable assets) of more than $500,000.
Tier 1 associations are required to have their annual financial statements audited and are required to lodge a copy of those audited financial statements with NSW Fair Trading (unless exempted), within the earlier of one month after the AGM or seven months after year end.
A Tier 1 association can be exempted where gross receipts for the financial year were negligible, but where current assets exceed the threshold ($500,000).
The financial statements of a Tier 1 association must be prepared in accordance with Australian Accounting Standards and include details of any mortgages, charges and other securities affecting any property owned by the association. It must also include a separate income and expenditure statement and balance sheet for each trust for which the association is the trustee.
The financial statements must be audited in accordance with Australian Auditing Standards. The audit may be carried out by either a registered company auditor or any person holding a certificate of public practice with a professional accounting body in Australia.
Tier 2
A Tier 2 association (i.e. all associations not captured in the Tier 1 category) is required to prepare financial statements which give a true and fair view of the associations operations, and which include:
- an income and expenditure statement and balance sheet that set out the appropriately classified individual sources of income and individual expenses incurred in the operation of the association and the assets and liabilities of the association;
- details of any mortgages, charges and other securities affecting any property owned by the association; and
- a separate income and expenditure statement and balance sheet for each trust for which the association is the trustee.
Application Date
These new requirements apply for those associations whose financial years end after 30 June 2010. For 30 June 2010 year ends, the requirements of the Associations Incorporation Act 1984 shall continue to apply.
Contact
Rob Mackay
T +61 3 8635 1800
rmackay@moorestephens.com.au
www.moorestephens.com.au
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Article Series
This article is part 3 of a 4 part series. Other articles in this series are shown below:
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NSW Inc Associations – Legislation updated