ACNC rule requires charities to disclose related party transactions
The Australian Charities and Not-for-Profit Commissioner has urged all charities to comply with new rules covering related party transactions.
For small charities, a ‘related party’ is defined as a person or organisation connected to a charity, with significant influence over it. For medium and large charities, it is defined in the Australian Accounting Standards Board’s AASB 124 Related Party Disclosures.
Examples of related party transactions include financial payments or the exchange of goods, property and services such as accounting or legal services.
Most charity leaders already understand the importance of disclosing any actual or perceived conflict of interest and ensure finances are managed responsibly. The new rule requires all charities to report them to the ACNC annually, from the 2023 Annual Information Statement (AIS) onwards.
The ACNC recommends charity leaders establish policies and a register for related party transactions and conflicts of interest.