|Lorelei Johns is a Regina-based Chartered Accountant whose practice focuses on non-profit organizations. |
Photo Credit: Greg Huszar Photography
Horse Sense Blog: Dreaming green and good governance.
By Lorelei Johns
It is said that horses love to dream. I imagine my horse, Red dreaming of warm spring days when he can move freely in a sun filled green pasture with the herd. Even in the world of horses, dreaming leads to action.
Dreaming about good governance also leads to action. As winter turns to spring, Not for Profit Boards turn their minds to the most up-to-date information to fulfill their stewardship role.
The most recent change impacting NPOs is the implementation of new accounting standards for this industry. In accounting lingo it is called CICA Handbook Part III, Accounting Standards for not-for-profit organizations. These standards are effective for fiscal years starting on or after January 1, 2012. Recently, I attended a course on these new standards.
It is the Board’s responsibility to learn and understand these new standards. Training must be provided to volunteers, management and staff. Communication to the users of your financial statements will result in more disclosure in the notes to the financial statements.
Here are some of the significant changes that may impact your organization:
· You will have a transition Balance Sheet with three columns;
· There are standards specifically for Contribution Revenue;
· Financial Instrument notes include detailed analysis of risks, i.e. credit risk, liquidity risk, market risk, currency risk, interest rate risk and other risk exposures;
· Cash Flow statements are now always required; and
· All outstanding government remittances must be disclosed in the notes.
Contact your local United Way office for workshops offered by community minded accountants. It is low cost and the presenters are very knowledgeable. Other educational options available include courses, readings, webinars provided by the Canadian Institute of Chartered Accountants (CICA). Check my website www.lrjca.com for resource links. Once you have a base line of knowledge, get in touch with your accountant for a discussion on how these standards specifically impact your NPO.
I believe that up-to-date fiduciary knowledge will lead you to greener pastures, just like Red and I will experience this spring.
Lorelei will be a presenter at an April 4, 2013 United Way Regina workshop, entitled “Internal Controls for Smaller NPOs”. If this is a topic you are interested in, look for this workshop announcement on United Way Regina’s website; www.unitedwayregina.ca/investments/workshops.
Lorelei presented at an April 4, 2013 United Way Regina workshop, entitled “Internal Controls for Smaller NPOs”. Here is her feedback on SKY Magazine's impact.