Financial Statement Presentation for Non-reporting Entities Report

This report provides an analysis of financial statement presentation, focusing on actual versus budgeted results, variance analysis, and differences in accounting standards between for-profit and non-profit entities. It highlights the importance of understanding financial legislation, including taxable transactions and reporting requirements for non-profit organizations in Australia, referencing sources like the Council on Foundations, AIC, and ATO. The report includes data on assets, liabilities, and equity, illustrating the variance between actual and budgeted figures, and emphasizes the need for non-profit organizations to adhere to specific accounting practices and reporting obligations.

Presentation of financial
statements

Actual results of non current assets
(% form)
2.36
%
5
.
9
0
%
60.18
%
3.30
%
Portion of non current assets
Trade & Other
Receivables
Available for
Sale
Investments
Property, Plant
& Equipment
Goodwill
Other Intangible
Assets

Actual results of non current assets
(dollar ($)form)
20,00
0
5
0,
0
0
0
510,
000
28,00
0
Portion of non current assets
Trade & Other
Receivables
Available for
Sale
Investments
Property, Plant
& Equipment
Goodwill
Other
Intangible
Assets

Actual results of current liabilities
Trade & Other
Payables
Short-term
Borrowings
Current
Portion of L/T
term
Borrowings
Current tax
liabilities
Short-term
Provisions
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
38,200
81,200
15,000
21,500 21,000
Current liabilities
Series1

Actual results of current assets.
Cash and Cash Equivalents
Trade & Other Receivables
Inventories
0 50,000 100,000 150,000 200,000
35,000
32,500
172,000
Current assets
Series1

Actual results and the budgeted results
TOTAL ASSETS TOTAL
LIABILITIES
TOTAL EQUITY
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Actual VS Budgted
ACTUAL RESULTS
BUDGETED FIGURES

Variance analysis
By conducting a variance analysis, it has
been observed that the actual results are less
than the budgeted ones.
The budgeted assets are $946,000 against
which actual results shows $847,500.
Similarly budgeted liabilities are $370,150
and actual are $298,550.
Reduction in liabilities is favourable whereas
reduction in assets may affect the financial
position negatively.

Difference between standards for profit
and non-profit entities
For profit firms, revenues and gains are
recorded in the income statement. In
contrast, NPOs prepare a statement of
activities in which expenses are properly
classified against the revenues to figure out
surplus or deficit.
The key difference is the concept of fund
accounting.
Profit entities will have a single ledger which
is a self balancing account. On the other side
non profit will prepare number of general

Difference between standards for profit
and non-profit entities
NPOs are required to account for donations
and grants as they are their sources of
revenue.
Generally, profit entities prepare their
statements using accrual method. In contrast,
non profit apply deferral method or restricted
fund method to recognize the revenue.
The main aim for profit companies is to
prepare the statements for showing
profitability whereas NPOs focuses on
providing meaningful information.

Features of financial legislation
Taxable Transactions
The Australian government provide many tax
concessions to the NPOs.
According to ATO, if the NPO is considered as
charity then it is exempted from income tax.
Charities are need to be registered with
Australian Charities and Not-for-profits
Commission (ACNC) in order to get tax
concessions.

Features of financial legislation
Reporting Requirements
The non profit organizations are obliged to
prepare and submit financial information as
per their legal structure, fund raising
requirement and others.
NPOs that are under limited by guarantee
are required to report to ASIC under
Corporation Act 2001.
The non profit entities that undertake
fundraising are obliged to submit their
audited financial records to the state

References
Council on Foundations (2018). Australia. [Online].
Available at: https://www.cof.org/content/australia
AIC (2018). Regulation of the non-profit sector.
[Online]. Available at:
https://aic.gov.au/publications/rpp/rpp114/regulatio
n-non-profit-sector
ATO (2014).Tax basics for non‑profit organizations.
[Online]. Available at:
https://www.ato.gov.au/uploadedFiles/Content/SME
/downloads/Nonprofit16966Tax_basics_for_non_pro
fit_organisations.pdf