Tier 1 associations financial reporting

Tier 1 associations must ensure these financial records are sufficient to enable financial statements to be prepared in accordance with the Australian Accounting Standards.

Tier 1 associations are those whose:

• total revenue as recorded in the income and expenditure statement (i.e. gross receipts) for a financial year is more than $250,000 or
• current assets are more than $500,000.

Current assets refers to assets (other than real property or assets that are capable of depreciation) held by the association as at the end of the association's last financial year. It includes amounts held in financial institutions, stocks and debentures.

Before the annual general meeting (AGM)

As soon as practical after the end of the association’s financial year the committee must:

1. Prepare financial statements in accordance with Australian Accounting Standards. See information below on Complying with Australian Accounting Standards.
2. Arrange for the statements to be audited in time for submission to members at the AGM.
3. Consider the financial statements and confirm that they provide a true and fair view of the association’s financial performance.  It is good practice to record this confirmation in the minutes of the committee meeting.
4. Ensure the AGM is held within 6 months of the end of the financial year.

At the annual general meeting

The committee must:

1. Arrange for the financial statements and auditor’s report to be submitted to the meeting.
2. Ensure a copy of the financial statements, auditor’s report and a record of any resolution passed concerning the statements or auditor’s report is included in the minutes of the AGM.

After the annual general meeting

Within 1 month following the AGM the committee must lodge with NSW Fair Trading:

1. The Annual summary of financial affairs – Tier 1 form A12-T1. (PDF, 1028.54 KB)
2. A copy of the audited financial statements.
3. A signed and dated auditor’s report.
4. A copy of the terms of any resolution passed at the AGM concerning the statements and audited report.
5. Payment of the prescribed lodgement fee.

Extension of time

An association should apply for an extension of time if it cannot hold its annual general meeting within 6 months after the end of its financial year or lodge its Annual summary of financial affairs by the due date. This can be done by lodging an Application for extension of time for holding annual general meeting or lodging annual summary of financial affairs form A11. (PDF, 988.11 KB)

The form should be lodged as soon as possible after the association becomes aware that it will be unable to comply with its obligations under the Act.

Complying with Australian Accounting Standards

Tier 1 associations with total revenue of less than $2 million in a financial year are not required to fully comply with Australian Accounting Standards. However, the financial statements must satisfy requirements set out in Class Order 11/01 financial reporting requirements and must contain:

• a statement of income and expenditure that sets out appropriately classified individual sources of income and items of expenditure incurred in the operation of the association
• a balance sheet that sets out current and non-current assets and liabilities
• statements of movements in the equity section of the balance sheet, being movements in retained surplus or accumulated loss and movements in any reserves
• notes to the financial accounts including, as a minimum, a statement of accounting policies appropriate for the association’s transactions
• details of any mortgages, charges and other securities affecting any property owned by the association
• a separate income and expenditure statement and balance sheet for each trust for which the association is trustee
• a consolidated statement of income and expenditure and a consolidated balance sheet, which consolidates its investment in any subsidiaries, as defined by Australian Accounting Standards Board AASB 127, except for any trusts for which it acts a trustee.

Tier 1 associations not covered by Class order 11/01 must prepare full financial statements, including a statement of cash flows and all notes to the financial accounts in accordance with Australian Accounting Standards.

Auditing of tier 1 association’s financial statements

The financial statements must be audited in time for submission to the association’s AGM. The auditor’s report must:

• be prepared in accordance with the Australian Auditing Standards
• state whether the association has kept the necessary financial records to enable financial statements to be prepared in accordance with Australian Accounting Standards.

For more information on the Australian Auditing Standards, visit the Auditing and Assurance Standards Board website.

Conducting an audit of tier 1 associations

An audit can be carried out by any of the following:

• a registered company auditor, or
• an authorised audit company, or
• a member, who holds a current public practice certificate, of the Institute of Chartered Accountants Australia and New Zealand, CPA Australia or the Institute of Public Accountants (formerly the National Institute of Accountants).

In most cases*,  an audit may not be carried out by any person who, within the last 2 years, is or has been:

• a member of the association, or
• an employee or provider of professional services to the association (other than audit services),
• a committee member, or
• the association’s public officer.

*unless the auditor satisfied the requirements of Class Order 10/2 exemption relating to auditor independence.

Visit the Financial reporting and audit exemptions page for more information on auditor qualifications.

Exemption from audit requirement

In limited circumstances an association, or any class of associations, may be exempted from the requirement to obtain an audit in a particular year. Visit the Financial reporting and audit exemptions page for information on current exemptions or applying for an exemption.

Exemption for registered charities

A NSW association also registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) may take advantage of an exemption and are not required to lodge its annual summary of financial affairs with Fair Trading or pay the annual lodgement fee.

To take advantage of this exemption, The ACNC’s Annual Information Statement for NSW organisations includes additional questions to collect information on behalf of Fair Trading. A NSW association (also registered as a charity with the ACNC) must lodge its Annual Information Statement (and financial statements if required) with the ACNC each financial year and must answer all questions. The ACNC will then share this information with Fair Trading.

Associations must continue to hold their AGM within 6 months of their financial year end date. All financial statements must be prepared as required by the Associations Incorporation Act 2009 and be submitted to members at this meeting. As a Tier 1 association this would include preparing and providing an audit report.

All associations must continue to notify Fair Trading of any changes such as the association’s name, details, constitution or public officer.

You can confirm your association’s status by searching the ACNC charities register.

For information about reporting obligations to the ACNC, visit the ACNC website.

Related information

Associations Incorporation Act 2009 Exemption order No. 001/18
(PDF, 174.2 KB)

Associations Incorporation Act 2009 Regulatory Guide A1
(PDF, 368.77 KB)

Need further information?

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