The following are important changes to note, and some traps to avoid when auditing a Performance Report prepared under the new Tier 3 NFP standard for the first time:
- Accumulated funds must now separately list revaluation reserves, accumulates surpluses, capital contributed, restricted and discretionary reserves and any other reserves separately. (A175)
- Movements in accumulated funds have to be shown in the notes (rather then in the Statement of Financial Position). (A231)
- A note must disclose the entity’s objectives, policies, and processes for managing its reserves, including the entity’s plans for applying the reserve towards its stated purposes, and when the entity expects the reserve will be applied. (A232,A234)
- There are prescribed income and expenditure categories - there are more than before so prior year comparatives will probably need to be restated. (A60,A89)
- These may be renamed (within reason) but you can't add extra classes in the Statement of Financial Performance as before – you have to show extra detail in the notes. (A91)
- However, you can add more categories to the proposed categories in the Statement of financial Position. (A119)
- Revaluations are allowed under the new standard, but must be applied to all of the class, and they are subject to depreciation and impairment considerations. (A121)
- If previous revaluations were made under PBE IPSAS 17 can remain under PBE IPSAS 17. (C19)
- Don't forget the need for a change in accounting policies note.
For a full list of requirements view the standard itself, or use the checklist that we have provided in our Tier 3 NFP (2024) template. Don't skip through the checklist without reading it properly! There are plenty of subtle fishhooks that are easy to miss.