Non-profit organisations: SECP adopts ICAP’s accounting standards

These will promote transparency, accountability and efficiency

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved the adoption of accounting standards issued by the Institute of Chartered Accountants Pakistan (ICAP) for non-profit organisations formed under Sections 42 and 43 of the Companies Ordinance 1984.

These standards will promote transparency, accountability and efficiency in the organisations providing volunteer services to the community in the country and will be in line with the best practices followed by developed jurisdictions.

The standards will be applicable to the financial period beginning on or after July 1, 2016, in addition to the already notified financial reporting framework, according to a statement issued on Thursday.

“The adoption of standards by the SECP will enhance the credibility of information by giving additional useful disclosures related to contribution, inventory, pledges, tangible and intangible assets, strategic investments, deferred revenue and allocation of expenses,” it said.

Moreover, the companies will have an option to present a statement of financial position and a statement of income and expenditure by using fund accounting. This will help the users of such statements to make decisions based on elaborate information and to reinforce the efforts made by such organisations for community welfare.

Published in The Express Tribune, May 13^th, 2016.

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