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Tier 3 Charities – Tour of the Performance Report

Tier 3 Charities – Tour of the Performance Report

Hi everyone, thanks for taking the time
to join us today. I’m Francesca Ephraim and I’m joined by Jamie Cattell, our Capability Accountant here at Charities Services. We’re co-presenting this webinar today. This is the sixth webinar we’ve presented this year in our lunchtime webinar series. The webinars are directed at charities that report under the new reporting standards, using either Tier 3 or Tier 4. If you want to watch the previous webinars you can use the search button on our website. The website address is and you’ll need to type in the word “webinar” in the search box at the top of the page. Please sign up for our newsletter while you’re there, or like the Charities Services Facebook page so you know when other webinars are coming up. Before we get started, we’ll just briefly go through the logistics and explain how the webinar will run. You should be able to hear us through your computer or your laptop speakers. If you can’t hear us properly try un-muting your sound or increasing the volume on your computer. On Windows computers the volume control
is normally found on the bottom right of your screen, and on Apple computers it’s normally on the top right. You’ll see a round orange microphone icon in the panel on the right of your screen, but you can just ignore this as it won’t affect anything. You may also experience some
echoing or distortion of the sound. If this happens try using headphones. And if the sound cuts out intermittently, it may be due to your internet connection and unfortunately, there’s nothing we can do at our end to help you with this. Also please note that this is a listen-only webinar – so we can’t hear you at all – so you won’t be able to ask us questions through your microphone. However you can type your questions, by clicking on the question mark icon in the panel on the right of your screen. We have our colleagues here with us today ready to answer your questions during the webinar. These will be answered privately to you, so other participants won’t be able to see them. We normally get more questions than we can get through, so if by the end of the session your question hasn’t been answered, please feel free to email us on
[email protected] I’ll repeat that: [email protected] You can download the handout, which is a copy of the slides, by clicking on the little document icon in the panel on the right of your screen. The link to these slides will also be sent to you tomorrow and we’ll include links to other useful resources mentioned in this webinar to help you with your performance report. And finally, if we run into any technical
difficulties on our side during the webinar we’ll mute the microphone and we’ll come back to you as soon as the issues are resolved. Hopefully this won’t happen! So what can you expect from the webinar today? We’re going to take some time to look at the components of a Tier 3 performance report. We’re also going to look at how the information is presented in the template, that’s made to help you report. We’re going to discuss what information you’ll need to collect throughout the year to make reporting easier. And we’re going to show you where to find some help. There is a lot of information to get through today, but remember you can re-watch the webinar again in your own time. We’re going to send you links to the webinar recording, and any resources we talk about, in an email tomorrow. So the webinar today is focused on Tier 3 charities. Tier 3 Charities are those charities whose day-to-day expenses are less than $2 million dollars per year and who use accrual accounting. Accrual-based accounting is when revenue is recorded on the date you issued the invoice, rather than on the date it was received. Expenses are recorded when they are incurred. Accrual accounting often uses accounting software such as MYOB or Xero, and it includes depreciation. So if you use cash-based accounting and you missed the Tier 4 webinar yesterday, you can find it on our website by typing in the word “webinar” in the search box at the top of the page. One of the obligations of being a registered charity is to report to Charities Services once a year. There are two separate things to do your reporting: You will need to complete a performance
report, and complete an annual return. Most people do their annual return
online as it’s quicker and easier to do it this way. In the annual return form, you’ll be asked to update your charities details (if any updates are necessary) and you’ll answer some questions about your charity. Some of the information may be the same as what it’s in your performance report so make sure you refer to your completed performance report for the answers. Your performance report will be displayed on the public charities register, and the data that you provide through the online annual return form is collated with the other 27,000 odd charities on the register, and then can be used to tell a story about the wider charitable sector in Aotearoa. Your charity needs to report to Charities Services within six months of the end of your financial year. So for example, if your charity’s balance date – which is the name for your end of financial year – is the 31st of March 2017, then you will need to file your annual return by the 30th of September 2017 which is six months after your financial year ends. So what are new reporting standards? Well, they came into effect on the 1st of April 2015, and the new standards set out how the not-for-profit sector will now prepare financial statements. The reporting standards are set by the
External Reporting Board (XRB). They are the independent crown entity that are responsible for developing and issuing accounting standards. In a nutshell, they provide a standardised way of accounting for the not-for-profit sector, so information is clear and comparable. Currently they only apply to registered charities, but we expect that they will roll out to all not-for-profit organisations in Aotearoa in time and they’ll be considered the best practice
for a not-for-profit organisation. As charities varies so much in size the external reporting board created four different tiers of reporting and a charity will choose the tier that they report in, considering their annual operating expenditure and whether they use cash or accrual accounting. The first step that you need to do to be prepared to report to Charities Services once a year is to complete a performance report that complies with the standards. The performance report includes non-financial and financial information as well as some further supporting information when that’s helpful. Overall it is designed to show simply: why you exist; what you’ve been busy doing; and how the money came in and out of your charity. There are some distinct sections of a Tier 3 performance report and we will take a look at all of them today. There are two non-financial statements: The Entity Information, which answers the question: “Who are we and why do we exist?” And the Statement of Service Performance, that answers the question: “What do we do and when do we do it?” There’s also three financial statements: The Statement of Financial Performance – it answers the question: “What did it cost and how is it funded?” Then there’s the Statement of Financial Position which answers the question: “What do we own and what do we owe?” The third statement is the Statement of Cash Flows – “What cash did we receive and what cash did we pay out?” And there’s also a Statement of Accounting Policies which shows how you did your accounting. And lastly the Notes section, and its purpose is to provide more context and support the information in the performance report. To make it easier for charities to comply with the standards a template has been developed and it looks similar to the one pictured on the screen. You can find the template on our website by searching for “new reporting standards” You need to download it to your computer and fill it in. The templates are specific to either Tier 3 or to Tier 4, so just check that you are downloading the right one for your tier. The template is a blank form and it’s available in Excel and a PDF format. You must fill it in the parts marked with a red asterisk. The Excel version of the template is very clever and it will calculate some of the figures for you. The template is password protected to avoid changes to the formulas, so to unprotect the sheet you need to go to the review button at the top of the screen, and you will need to enter the password
“xrb” in lowercase letters, and for each sheet you will need to unprotect it using this password. We’ve made a handy video tutorial to
help you use Excel if you’re not very familiar with it. And we recommend that the first time you report, you use the template, as it’s been designed to help you. However it is optional and we will accept performance reports in other formats, but you need to make sure that they comply with all the requirements of the standards. For the purposes of today’s webinar we’re going to be looking at a charity that we made up, and we will be using the Excel version of the template, to show you around the performance report. We’ve named our charity the Awhina after-school care Trust. The purpose of this charity is to provide free after-school care to students of local primary schools. In the beginning they operated with no expenditure, and were reliant on a donated space and donated time from volunteers. They were initially set up with a donation of $5,000 from a community supporter and were gifted a very old computer. They have since expanded and they now use grants provided to them by the government so they can pay wages. They also sell calendars containing artwork made by the children who attend the care programme, as a way to raise extra funds. They are applying the reporting standards for the first time, for the financial year that ended on the 31st of March 2016. So let’s now take a look at the non-financial parts of the performance report… As I said before, the non-financial information consists of two statements. They are the Entity Information and the Statement of Service Performance. We will look today at the Entity Information first. The Awhina after-school care Trust has used the template and that is why their information looks like this. The Entity Information is an introduction to your charity, and it asks you to talk about what you are set up to do and how you are structured. And this is the first page that people will look at in your performance report. Remember your performance report is displayed on the charities register, which is open to the public to look for information about a charity. And if you look carefully on the screen you will see that any information that you must complete is marked with a red asterisk. You can see that this part is very straightforward and it just asks you to record things like your charity’s legal name and any other name you are known by, what kind of structure you have, so you might be a Trust or an Incorporated Society, or a group of people doing awesome stuff but not registered with the Company’s Office. So here we call these groups Unincorporated Societies. If you are unsure of your legal structure you
can check the Company’s Office website. We’ll send you a link to their website tomorrow, in an email. You also need to add your charity’s registration number, which you can find when you search the Charities Register. The entity’s purpose or mission is where you write about what your charity was set up to do. So our example is an after-school care programme, and their mission statement is: “to provide a free after-school care programme to children in our community and provide support to students of local primary schools” So you can see that’s a nice short line that tells you a lot about what this charity is set up to do. And that’s the purpose of the Entity Information. So don’t write a lot here… just a nice brief introduction to your charity. The next part is entity structure. Again this is fairly straightforward. So you can see on the example that the Awhina Trust has described how many trustees they have, and they listed they have a Chairperson, a Treasurer, and a Secretary. They also wrote about the operational structure of the Trust, and they told us that they employ a part-time employee and have a team of 15 volunteers. The next piece is asking you to write about where you get your main sources of cash and resources from. So the example shows that the Awhina Trust relies on a grant from the government to cover wages, donations and does some fundraising. The next piece is main methods to raise funds. So if your organisation does fundraising this is where you write about it. You can see that the Awhina Trust runs a sausage sizzle and sells calendars. Any fundraising they do is used to purchase assets for the charity. The last paragraph asks about your reliance on volunteers and donated goods and services. So if you don’t have volunteers or donated goods or services, you can leave this blank. And if you do have them, then write about them, and let people know that you have lots of support and people giving time, goods or services to your charity. Collecting material for the Entity Information section won’t be too hard – so your Constitution, your Trust Deed, or your Rules documents are all good sources for finding out things like the purpose your charity was set up for and the legal name of your charity. There should also be a clause in that document that shows how many trustees or committee members you are required to have. This is a good opportunity to check you have the right number of trustees or committee members as set out in your charity’s rules document. As this is non-financial information, someone other than your treasurer can write it and have it reviewed by the whole committee. It can be completed at any time throughout the year and doesn’t need to be left to the last minute. This information usually remains relatively consistent from year to year, so make sure you save it somewhere so you can access it next year. It’s also often used for funding applications, so you can copy and paste it from your performance report if needed. Remember, the purpose of the Entity Information is to introduce your charity, so readers can quickly get a good idea of the kind of organisation you are. Please make sure you include your up-to-date contact information, as this will help to promote your charity and enable people who want to donate time and money to be able to get in touch. The next section in the performance report is the Statement of Service Performance, which answers the question, “What did you do during the year?” and it asks you to describe your outputs and your outcomes. Outputs are just the activities that your charity undertook throughout the year. If it is sensible to do so, you can add in quantities. For example: we taught 125 people how to swim, or we delivered 1,300 meals to the elderly. So this is the place to record your outputs. You don’t need to list everything you did, just the most important activities. You also need to write an outcome statement which shows why those particular activities we’re prioritized, and what change you were seeking by doing those activities. People get very concerned here that you need to link this, and provide evidence that your outputs lead to the outcome you wanted. I can assure you that this is not the case. Charities Services is not judging you on your outputs, whether you have done enough, or whether your output lead to your outcome. However other stakeholders may have an interest in your output and outcomes, so it is in the interest of your charity to fill in this part to the best of your ability. Take a look at the screen and you will see that the Awhina Trust have provided an outcome statement. It’s right at the top of the page. The outcome statement reads: “To ensure children whose parents work
full-time have a safe, supervised space after school” An outcome statement is compulsory for Tier 3 charities. And writing it will help you clarify why
your charity does the activities that you do. Remember you don’t have to prove that the output – so your activities – lead to the outcome in your performance report. You can see on the screen that the majority of their work this past year has been running the after-school care programme, so they have recorded: the number of after-school care days during the year, and the average number of attendees at the after-school care programme. They also did some fundraising and sold 100 calendars and made a grant of $1,000 to ten families. In the additional output measures they told us that they had updated their website and improved the design. They also provided some feedback from a parent in the additional information box at the bottom of the screen. This provides more information to people about the service this charity offers. If you take a look at the far right column of the screen, you can see that this column for last year is blank. If this is your first year of reporting under these standards, you do not have to supply your previous year’s figures but every year after that you’ll be required to do so. We recently presented a whole webinar just on the Statement of Service Performance, so if all this is new to you please take a look at it. A link will be included in the email, we’ll send to you tomorrow. So what do you need to do to get ready to report? A plan at the start of the year makes reporting on outputs very straightforward, and if your charity has its performance report audited at the end of the year, you’ll need to think about how you’ll keep valid records. It’s a good idea to have a planning meeting with your auditor at the start of the year, so you’re both clear about record-keeping, as you’ll need to decide the evidence you will collect for your Statement of Service Performance. Please note if your operating expenditure is under $500,000 you can choose whether or not to have your non-financial information included in your audit. This will need to be agreed with your auditor, so make sure you have a chat with them so you’re both on the same page before your new financial year starts. If your operating expenditure is over $500,000 then you can choose whether you have a review or an audit. Audits are now compulsory by law for all charities that have over $1,000,000 worth of operating expenditure. So let’s just do a quick recap so you are clear… We’ve discussed that there are two non-financial statements that you need to complete: The Entity Information, which is the introduction to your charity, and a Statement of Service Performance. Outputs are your activities and they must be recorded, and you also need to write an outcome statement – stating what your organisation seeks to achieve by the work that you do. Doing some planning now will make it easier to report at the end of the year. So that’s a quick overview of what you need to do to complete the non-financial parts of your performance report. And I’m now going to hand over to Jamie, who is going to take you through the last half of the webinar and discuss the financial parts of the performance report. Thanks for the introduction Francesca. Hi everyone, as Francesca said I’m Jamie Cattell, and I am the Capability Accountant here at Charities Services. I’m going to talk you through the financial statements for Tier 3 charities. There are three financial statements required for Tier 3 charities. The Statement of Financial Performance, which reports all revenue, expenses and the surplus or deficit of your charity for the financial year; The Statement of Financial Position, which provides a snapshot of your charity’s
assets, liabilities and accumulated funds – which some of you may be familiar with
as equity at the balance date. Third is the Statement of Cash Flows, which provides information about where cash came from and where it went during the year. This statement will basically be a summary of your bank statements. It is also worth pointing out while the Statement of Accounting Policies is part of the notes, it is very important as it provides context to the financial statements. Remember, as Francesca said earlier, Tier 3 financial statements are prepared using accrual accounting so the financial statements will reflect this. There are three key components to a
Statement of Financial Performance: Revenue, expenses and net surplus or deficit. Revenue represents all of the income that your charity has received during the year. It includes things such as cash received from sale of goods and services and grants. It also includes money to be received from interest or from invoices given to customers but not paid. Expenses represent all of the costs that your charity has incurred during the year, so it would include day-to-day costs, such as rent and salaries. It also includes items like invoices received
for bills but not yet paid and depreciation. Net surplus or net deficit is simply the difference between the revenue and expenses. You will see on the right-hand side of the screen what the Statement of Financial Performance will look like for the Awhina Trust when completed in the template. As you can see, all of the transactions have been grouped into revenue and expenses and the value of these has been entered into the columns of the template. The next thing you will notice is that there are only a handful of lines under each of the headings and not a long list of expenses that some of you may be accustomed to seeing. This is because the Awhina Trust’s revenues and expenses have been classified into the minimum categories. You can see that there are five categories in which to place your revenue, and five categories in which to place your expenses. You will also notice that most of these categories have an asterisk next to them, which means they are required. We have recently done a webinar on using the minimum categories, which we will send you a link to. If you need further information please have a look at that webinar. If you want to provide more information on revenue and expenses within these categories, you can do so in the notes. The surplus or deficit for the year is the leftover, after subtracting expenses from revenue. The Excel template will do this calculation automatically for you from the revenue and expenses you entered in the statement. Another thing to point out in the template is
that there is a budget column. There is no asterisk so it is optional. You can use it if it’s useful to you. We come now to the second of the financial statements of the performance report… The Statement of Financial Position. It has three parts: Assets are the things your charity owns and what is owing to it, for example cash in the bank, buildings and money owed to you. Liabilities are the obligations your charity has to others and what you owe, for example, loans from the bank or money owed for things you have bought. Net assets is the difference between your assets and liabilities. This can be thought of as the amount of assets left over for your charity once it pays all of its liabilities. Again, on the right hand side of the screen, you will see what the Statement of Financial Position looks like for the Awhina Trust within the template. We can see that it has been split into the three sections we talked about: Assets, liabilities, and net assets. The Excel version of the template will automatically calculate the net assets for you, based on the assets and liabilities entered above. The most important thing you need to know about this statement, is that the net assets need to be equal to the row at the bottom of the template called total accumulated funds. If they aren’t equal then you will get an annoying “FALSE” message. All of the numbers in the accumulated fund section are populated from note 5, which we will discuss in detail shortly. For now, you just need to know that they are equal. If you do get the FALSE message, you will need to double check the assets and liabilities you have entered, or the numbers in the accumulated funds section. The next thing you will see, is that assets and liabilities have been further split into current and non-current. What does this mean? This is used to distinguish if the item is short or long term. Current assets are those that will be used up in less than twelve months, for example, a debtor would usually pay within twelve months so this is current; on the other hand a van would be expected to be used for several years, making it non current. A current liability is one with a term less than twelve months. Money you owe for goods your charity purchased would be a current liability. A loan due in many years would be a non current liability. This brings us to the third financial statement: The Statement of Cash Flows. The purpose of this statement is to summarise your bank statement and show all the places cash came from during the year and all of the places where it was spent. The standard requires that cash received from operating activities is reported separately from cash received from investing and financing activities. The Statement of Cash Flows indicates the sustainability of the charity by showing if there is a positive cash flow. It also shows the level of investment activity, detailing how much money was spent on acquiring assets. Calculating one of these can be quite involved so we don’t have time to go over this today. We have done a webinar which goes through a detailed example of preparing a statement of cash flows. We will email you a link to this. Alright… into the home stretch! This is the last part of the performance report template. It’s for the Statement of Accounting Policies and Notes to the Performance Report. The purpose of this section is to provide readers with a greater understanding of the information in the financial statements. The first note is note one – oops, apologies… The last statement is the Statement of Accounting Policies. This statement provides context to the other parts of your performance report. There are five parts that are required for Tier 3 charities within this statement. The basis of preparation statement is already filled out for you. What it says is that your charity is allowed to use Tier 3, and that it has prepared the performance report using accrual accounting. Next is GST. Included in the template are two example paragraphs, explaining whether you have included GST in your performance report. The first says that the charity is excluding GST, and the second says that it is not. The Awhina Trust is a very small charity and is not registered for GST, so it would select the second paragraph and prepare its performance report with GST included. We would then delete the first paragraph. Third are specific accounting policies. Under the standard, your charity is required to report on the accounting policy used for each significant type of transaction, or significant items on the statement of financial position. What is significant? To know if something is significant, you need to ask yourself whether you would want to know about it before you made a decision. The Awhina Trust has included here an accounting policy which explains how they have accounted for their grants. Fourth is disclosure of any Tier 2 PBE standards applied. As a Tier 3 entity you can opt up to Tier 2
accounting standards where you need to. This could be to prepare consolidated accounts, revalue property plant or equipment, or revalue investments. You have to note this here. Last is information regarding any change in accounting policies that have been made during the year. The template comes with a statement that there have been no changes in accounting policies during the financial year. Awhina has not changed any accounting policies so they have deleted the bottom box. The final part of the performance
report which is required, are the notes to the performance report. There are a number of notes here that are required. It looks like a lot, but don’t panic!
We’re here to help you out. We will be going through all of the notes in detail. First is note one: Analysis of Revenue. Remember earlier where we said you could break down your revenue if you wanted? This is where you do it. This note is optional, but can be used by your charity to detail individual revenues. You might use it to break down your grants to show how much was received from each funder. Feedback we’ve had is that a lot of funders require you to do this. Now, a reporting tip: If you do choose to delete this, or any other note, it is good practice to re-number the
notes left over so that they make sense. For example, if you delete this note, what
was Note 2 should now be Note 1. Note 2 is a detailed breakdown of the expenses incurred during the year. As with Note 1, this note is optional but we recommend using it where you wish to provide additional information. Note 3 is the same as Notes 1 & 2, but for the assets and liabilities on the Statement of Financial Position. You can use Note 3 when you want to explain a bit more about the items on the Statement of Financial Position. It is also optional. Note 4 is a required note if your charity
has property plant and equipment. You can see on the screen the types of things that go in here – things like buildings, vehicles and office equipment. This note tells readers what things are worth in this year’s performance report compared to last year’s. It does this by: taking last year’s value, then, adding the things you bought or were given, taking off the things you sold, and taking off depreciation. The note will do the calculation automatically for you based on what you enter into the white cells. Look to the right of this box and you see another box. This box is used where your charity does not want to revalue property plant and equipment, but wants to say where it has a current value and it thinks it’s important. Awhina Trust does not have anything to report so they have just entered n/a or not applicable here. At the bottom of this note, you will
see a box for significant donated assets. You can see that the Awhina Trust has
recorded something in here. A donated van for $3,000. Because $3,000 is a lot for our charity, this would likely be considered significant, so we need to record it. Significant assets donated but not recorded in the financial statements is below this. This can happen where a value is not
available for the donated asset. An example would be a donated piece of art that has never been sold. Note 5 is Accumulated Funds. It is very important that you get this note right, because the numbers in here will also be
populated into the Statement of Financial Position. Often the main reason people get the FALSE message we talked about on that statement, is because one of the numbers entered here is not right. What this note tells readers is how much
money your charity has made over its entire life. This note has three parts. As quite a lot is going on in here I will talk through it section by section. Capital is any money given by owners or trustees. For Awhina Trust we can see that last year they had $4,700. This has been carried forward to the current year. We can then see that a further $5,000 has been given by trustees this year, which gives us $9,700 at the end of the year. Accumulated surplus or deficit is all of the surpluses and deficits made over the life of your charity added together. The Excel template will calculate most of this for you automatically. We can see that it has taken the closing balance of zero from last year, then it has added the surplus of $113, which is the same as on the Statement of Financial Performance from earlier. It then adds the transfer from reserves of
$900 to give us the result of $1,013. Reserves are for any money your charity has put aside for a specific purpose. This amount is usually transferred from accumulated surpluses. The Awhina Trust set aside nine hundred dollars last year to purchase a new
computer this money was then used this year to actually purchase the computer
you can see the transfers in and out of the reserve highlighted on your screen the excel template adds all of these
together in the closing balance row you can see that for our FINA trust the
total is ten thousand seven hundred and thirteen dollars this is the number that
will populate into the statement of financial position and needs to equal
net assets as we talked about earlier if it doesn’t you will get that annoying
false message at the bottom you can break down and explain any reserves you
made for a specific purpose our FINA trust has included here the reserve they
created for the purchase of the new computer which they created last year
and used this year notes X is for contingencies and commitments
commitments are situations where there has been no financial transaction but
your charity has agreed to the future commitment our FINA has recorded a
commitment here for the building it leases as Athena has entered a
commitment it will delete the second paragraph below which states that there
are no commitments contingencies are events which are outside your control
but could cause a significant cost to your charity you might be thinking what
do I report in here there’s loads of things that could impact my charity it’s
a bit complicated and quite rare to have things that you need to talk about in
here and you will likely not have anything to talk about the sort of thing
you would include here would be a court case that is yet to be settled guarantees are any guarantees your
charity has made for another for another person such as being a guarantor for a
loan afina has no contingencies or guarantees so has deleted the table and
left the statement that there are none the last of the tap the last tab of the
template contains note 7 to 12 note 7 is rather unhelpfully known as other the
things in this note are less common but we will touch on them briefly
significant grants and donations which have been made but have not been
recorded as a liability is for grants or donations that are restricted in their
use but which have no return condition for our FINA if the grant they received
to pay wages had no requirement to be returned it would be included here goods
or services provided in kind are for significant transactions that do not
involve a financial exchange such as performing services for each other or an
exchange of assets last is assets used as security for liabilities if you had a
loan secured by a building you would record this in here because our FINA
trust has none of these they have deleted these notes note 8 is assets
held on behalf of others our FINA trust doesn’t have anything to include here so
they have just entered na note 9 is for related party transactions
the first question you may be thinking is what is a related party this note is
very important as related party transactions are common in the
not-for-profit sector for financial reporting purposes a related party is
someone that has significant influence over the charity but you can just think
of it as decision-making power for Athena this is the trustees and it also
includes close members of their families because of their relationship to each
other it can also be other organizations that
have significant influence over the charity so related parties can be both
people and organizations why should an entity report its related party
transactions it’s all about being open and honest as related party transactions
can affect how charities operate it can be a really big benefit to you to have
these relationships so the standard requires you to state these types of
transactions doing so will help protect your charity’s reputation these
transactions include both those with money and those in-kind we will include
a link to our resource on related parties in the email that we send out as
you can see our fee now has had some related party transactions let’s look
first at the transaction to do with Samantha Jones Samantha Jones
is a trustee on the board of the Athena trust and is considered to have
significant influence or decision-making power in the trust speedy print is owned
by her husband so by virtue of the relationship speedy print is also to be
a related party they have paid $50 for printing – speedy print during the year
imagine a reader doing a quick google reveals the cost of printing the
calendars is consistent with the normal cost of
printing nothing too exciting there next we’ll look at the transaction with Joe
Bloggs Joe Bloggs is the chairman of the trust and so again is considered to have
significant influence or decision-making power because he controls the blog at
web design company this company would also be considered a related party we
can see that the trust has paid $500 to blogger for the website redesign again
the reader does a Google but this time they find that Joe Bloggs made the
website for the charity at half price this is valuable information to a reader
because they now know that the charity was able to obtain a benefit not
necessarily available to other people given that Athena has had related party
transactions it would then delete the related party paragraph which says that
there are no transactions involving related parties next is note in events
after balance date this note tells readers about anything significant that
happened after the financial year ended one good example of an event like this
would be if the Athena Trust lost its funding stream while this wouldn’t be
reported in other sections of its report a performance report for the year
knowing this would likely affect the decisions made by readers within this
note you would want to say what the event was the financial impact and how
this might affect the ability of the charity to continue because Athena has
nothing to report here we would delete the table and just leave the paragraph
below note 11 is ability to continue operating this note comes pre-populated
so there is nothing to change here this note is only really needed if you intend
to wind up your charity within a year no 12 is correction
of errors the purpose of this note is to say when a significant error has been
fixed in last year’s performance report it comes pre-populated with an n/a or
not applicable message which states that there have been no errors requiring
correction in the case that one is identified however within this note it
would be wise to put the cause of the error and the financial impact of the
error last is a section for anything else you want to include you can
basically put anything you wish in here provided it does not contradict other
parts of your performance report for example you may want to talk about how
profitable a fundraising event was you may also want to explain that you have
more cash than usual because you are saving up for something that will help
your charity our charity might want to report that to saving for a printer so
that it can print its own calendars you can also use this note to further
explain other information in your performance report so readers can
understand it more easily congratulations you made it that
completes the financial information in the performance report there are two
three required statements the statement of financial performance which answers
what did it cost and how was it funded the statement of financial position
which shows what you own and what you owe the statement of cash flows which
shows all the places where money came from and where it went and the
accounting policies and notes which supports information in other parts of
your performance report start collecting all the data you will need to prepare
these statements at the beginning of the financial year it will take some time to
review your current practice and see what else if anything you need to do
don’t leave this until the end of the financial year so now we’re going to tell you a little
bit of that where to find some help we understand that this is a lot to take in
for a sector that are short on time and predominantly run by volunteers so we’ve
been busy at charity services making resources to help you learn what is
required from you and you’ll receive a list of those resources tomorrow any
other time please go to our website so that’s WWE charities govt tnz and search
for new reporting standards if you need some specific help there’s a wealth of
information there for you we’ve made videos guidebooks information sheets as
well as the template you can download and there’s some guidance notes that set
alongside the template we’ve written guidebooks specifically for tier 3 and 4
tier 4 charities which really do help explain what’s required and you can
download it please make sure you sign up for our blog and our newsletters too
while you’re on our website the newsletter will let you know when we’re
making new resources and the blog focuses on areas that we identify that
people are having trouble with and there are also people that can help you too
so you can email specific questions to us in ari’s like charities at DIA govt T
or indeed or you can call us on a 508 to 4 to 7 for 8 also have a chat to your
accountant here is what the annual reporting guide looks like so you know
what to look for on our website so you can download them and they’ll provide a
step-by-step guide to completing your annual reporting so we want to make sure
that you are clear about the steps you can take now to get started with these
new standards in a charity services it’s our job to support you in the uptake and
application of the standards so let’s recap again
mr. charities receive benefits and in return are obliged to report according
to the new reporting standards tier 3 charities are those with annual
operating payments below two million dollars and they use accrual accounting
if you collect your data through the year it’s going to make it easier to
report at the end of your financial year there’s lots of help
so there’s templates guidance notes and further resources to assist you and
applying the new reporting standards and remember you’ll receive an email from us
tomorrow with links to the resources mentioned in the webinar and a link to
the webinar recording so you can watch it again so lastly it comes to saying
thank you we understand that there was a lot of information in the webinar today
so remember you can revisit again revisit it again when you are writing
your performance report as it will be uploaded to our website we hope that
attending today was useful to you and now you understand more about how to use
the template to prepare the performance report
so to end we’d like to thank you for listening and today and also for the
work that you do in your communities you’ll work not only strengthens the
community you live in but it has a really positive outcome and
strengthening New Zealand as a whole so all the very best for your reporting you

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