Registered charities must report to Charities Services using a tier system based on their annual expenses or operating payments from the past two years. 

Financial reporting standards were introduced in 2015 to provide consistent, transparent information to the donating and taxpaying public. The reporting standards are based on a tier structure that reflects the size and complexity of the charity. 

In 2023 the External Reporting Board (XRB) published updated accounting standards for Tier 3 and 4 registered charities.

If your charity’s financial year began on or after 1 April 2024, the Tier 3 (NFP) and Tier 4 (NFP) Standards are now in effect and you should be using or preparing to use these.

What do you need to do? 

1. Know what tier you are

There is specific information for Tier 3 and Tier 4 charities. You can check which tier your charity is here.

2. Know what has changed

The Statement of Service Performance, which is the non-financial portion of the Performance Report, has been simplified. Instead of reporting ‘outcomes’ and ‘outputs’, charities are now required to describe their main activities undertaken during the financial year and provide a numerical measurement as far as possible. Tier 3 charities are also required to describe what objectives the entity is seeking to achieve over the medium to long term (i.e. in the next 3 to 10 years).

The required categories of revenue and expenses in the financial statement portion of the Performance Report have also changed. The wording has been simplified and some categories have been split into more detailed groupings for additional clarity.

For example, funding from grants is now separated into more specific groupings, and the revenue category of ‘Donations, fundraising and other similar revenue/receipts’ has been renamed and no longer includes grant revenue.

The previous expense category of ‘Volunteer and employee related payments’ has now been split into two new categories separating employee costs from volunteer related costs.

Understanding the changes now will ensure you are organised at the end of your financial year in advance of the Annual Return and Performance Report filing date.

3. Be ready to report

To find out when your charity needs to use the updated standards see either Tier 3or Tier 4 whichever is applicable to your charity. You have 6 months to file after your financial year (balance date) ends. If you are unsure of your charity’s balance date, you can find this by logging in to your charity’s online account.

4. Find more information

External Reporting Board |Tier 4
External Reporting Board | Tier 3 and What’s changed in the new Tier 3 Standard

For more information visit the Charities Services New Zealand.