Guideline for Accounting and Financial Reporting by Non-Government / Non-Profit Organisations
Thursday, October 8, 2009
Guidelines are recommendations to help and to promote sound financial systems and financial stability, locally as well as globally. They play an important role in strengthening financial development and in reducing vulnerability of financial statements to various creative accounting practices adopted in different industries. Guidelines vary in scope and range from broad principles to specific accounting and financial reporting methodologies.
The Guideline for Accounting and Financial Reporting by Non-Governmental/Not-for-Profit Organisations (NGOs/NPOs) has been developed in order to promote transparency, accountability and to develop, disseminate and promote implementation of better accounting standards and best practices for NGOs/NPOs. In developing this Guideline, the Institute has considered the ‘SAFA Standard and Guideline for NPOs (including NGOs)’.
The specific objectives of developing this Guideline also include:
The Guideline for Accounting and Financial Reporting by Non-Governmental/Not-for-Profit Organisations (NGOs/NPOs) has been developed in order to promote transparency, accountability and to develop, disseminate and promote implementation of better accounting standards and best practices for NGOs/NPOs. In developing this Guideline, the Institute has considered the ‘SAFA Standard and Guideline for NPOs (including NGOs)’.
The specific objectives of developing this Guideline also include:
- development of a high quality, understandable and enforceable Guideline suitable for NGOs/NPOs in Pakistan,
- reduction of the financial reporting burden on NGOs/NPOs meeting the needs of the various users of the NGOs/NPOs financial statements.
The following aspects have been considered in developing the Guideline:
- it shall be recommendatory for NGOs/NPOs particularly for those for whom no accounting framework has been prescribed;
- it shall not be applicable on NGOs/NPOs engaged in Microfinance;
- ensure that it is inline with the International Accounting Standards/ International Financial Reporting Standards;
- recognition of transactions in a manner that would be readily understood by the various user groups;
- corresponding to the understanding of the transaction provision of the least cumbersome method of achieving the desired accounting treatment or disclosure for a NGOs/NPOs that is not complex provision of guidance;
- that is expected to be widely relevant to the transactions of NGOs/NPOs which are written in terms that can be understood by such entities ensuring that the measurement methods prescribed in the Guideline are reasonably practical for NGOs/NPOs.
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