Information on the Register: understanding financial information

All charities must provide financial information in their Annual Information Statement. Medium and large charities also need to submit financial reports.

Looking at the financial information of charities

When deciding whether to donate to or volunteer for a charity, the financial information on the ACNC Register provides a basis for understanding the charity and its activities in greater detail. However, it is easy to misunderstand a charity’s financial position by judging it solely on its financial information, or comparing its financial information to another charity, without considering its unique situation. This is especially the case for small charities, as they only provide nine pieces financial information in the Annual Information Statement, and do not need to provide financial reports which often contain more details about a charity’s financial position and activities.

Attention - Important information!When looking at a charity’s financial information on the ACNC Register, always consider potential factors that may affect that information and how you interpret it. If possible, look for other sources of information, including contacting the charity to ask questions.

Factors to consider when interpreting a charity’s financial information

Each charity has its own particular circumstances. These affect how it will record and present its financial information, including in its financial reports. The following are some factors to consider when interpreting a charity’s financial information (these could also guide any questions you may wish to ask the charity):

Size and complexity of the charity

This could impact on various things such as wages and administration costs as a percentage of expenses. For example, a small charity may rely entirely on volunteers to do administrative work and so records no administration costs. Read more about charities and administration costs

Operating locations

Operating in remote locations may result in higher costs. For example, a charity operating in outback Western Australia is likely to have higher costs than one in Perth due to the size of territory it needs to cover and the increased costs in shipping in supplies and services.


Different activities have different associated costs. For example, a public ancillary fund that provides grants to other charities would mostly have fundraising and administration costs, while a charity that provides direct care to people with disabilities would have large service delivery costs.

Assets and liabilities

There is a risk of misunderstanding a charity’s financial position by comparing its assets and liabilities without further context. For example, the value of a charity’s assets may rise from one reporting period to the next, and therefore appear as if it has acquired new assets, when in reality it has operated in one location for more than 50 years and owns property that has increased in value. Another example would be a charity that owns expensive assets because these are used in providing direct services to beneficiaries, such as aged care services.  However, it would not necessarily be able to sell this equipment to repay its debts unless it is intending to wind up. 

Some charities may report their grants as liabilities. For example, a school may have a grant to build a gymnasium. However, until it has been built they may choose to classify it as a liability.


Funding bodies may impose different requirements on the charities they fund. For example, the majority of funds may be paid out at the start or end of a project. This may result in one reporting period showing few funds and the next reporting period showing large funds, or vice versa. Comparing only one reporting period of a charity against the same period of another charity (with different funding arrangements) without taking this into account would not give a clear picture.

Some charities may also interpret grant income and ‘in kind’ donations (including contribution of professional services) differently. Some charities will recognise the grant upfront and not apportion the grant income to different reporting periods. For example, a school may have a grant to build a gymnasium and choose to recognise the whole grant in the period they receive it.  Charities may already have an internal policy on how they should account for ‘in kind’ donations. For example, some charities may have a policy in place for not accounting for donated goods below a certain marketable amount or they may not account for all clothing and donated goods if they do not believe it can be resold for revenue. 

Information on how a charity accounts for transactions can often be found in Note 1 of the charity’s financial statements.

Presentation of financial reports

All charities have to prepare their financial reports in accordance with Australian Accounting Standards and present a true and fair view. However, the way one charity presents information in a financial report may be different from how another charity presents its information. As long as it is a true and fair view this is acceptable. Charity finance staff and their advisers use their professional judgement to decide how accounts are treated and financial reports are prepared. For example, a charity may provide a detailed breakdown of expenses (such as ‘stationary expenses’) whereas another charity may include smaller items (such as stationary) as part of ‘other expenses’.

The way charities allocate and classify costs can also vary quite significantly. For example, some charities may focus on program allocation of costs but other charities may group costs according to their nature (such as ‘employee expenses’, ‘administration’ and so on). 

Points to consider before comparing the financial information or financial reports of charities

  • Are the charities reporting on the same basis (cash or both accrual)?
    Cash and accrual accounting records transactions differently and will affect how you interpret the financial report, and will only create misunderstanding if compared.
  • Are the charities preparing their financial statements using the same basis of preparation (general purpose or special purpose)?
    Both general and special purpose financial statements meet applicable Australian Accounting Standards and provide a true and fair view. However, general purpose financial statements usually provide additional disclosures that may not be included in a special purpose financial statement.
  • Are the charities’ financial statements audited or reviewed?
    An audit provides a higher level of examination and assurance than a review. Financial statements that have been audited or reviewed would have a level of assurance provided by a third party.
  • Before you compare, check the profit and loss or income and expenditure statement for each charity to see if the results are reported in a similar fashion.
    It is hard to compare line items when different information is disclosed in the reports. Some charities may choose to report and allocate cost by functions such as reporting on program cost, as opposed to nature classification such as according to salaries, electricity etc.
  • Do the charities conduct activities biannually or respond to emergencies which may not occur every year, for example natural disasters?
    This will show little activity and expense some years as opposed to others.

Where to find more information about the charity’s finances

  • Visit the charity’s website
  • Read the charity’s annual report
  • Contact the charity and ask questions

Financial information: what we ask for and why

We ask charities for basic financial information to give an overview of their income, expenses, assets and liabilities. The size of the charity will determine the minimum detail they are required to provide.

We use the financial information charities submit in different ways, including to undertake ‘recognised assessment activities’ (as set out in the Commissioner’s Policy Statement: Annual Information Statements), and also to reduce regulatory burden (such as by sharing it with other agencies). For more information about each line item and why we ask for financial information read the Annual Information Statement guide.

The financial reports we require

A medium charity must submit either an audited or reviewed financial report. A large charity must submit an audited financial report. Small charities are not required to submit a financial report (although they may submit one if they wish).

While charities are required to comply with Australian Accounting Standards, there is no set format or template that all charities follow.

More information

External resources