What's Happening?
Humentum, a global nonprofit, and the Chartered Institute of Public Finance and Accountancy have launched the International Non-Profit Accounting Standard (INPAS). This new standard is designed to improve
financial reporting for small and midsized nonprofits by providing a standalone, accrual-based framework. The INPAS draws on established international frameworks, including the IFRS for SMEs Accounting Standard, and aims to enhance consistency, comparability, and credibility in nonprofit financial reporting. The standard is available for free and is expected to ease the burden of multiple grant reports and audits, streamline due diligence, and increase funders' confidence in financial information.
Why It's Important?
The introduction of INPAS is significant as it addresses the lack of standardized financial reporting for nonprofits in over 90% of countries. By providing a harmonized approach, the standard is expected to facilitate fairer funding and more effective partnerships within the nonprofit sector. This development is particularly crucial for small and midsized nonprofits that handle complex transactions and need to demonstrate accountability to stakeholders. The adoption of INPAS could lead to increased transparency and trust in the nonprofit sector, potentially attracting more funding and support from donors and governments.
What's Next?
The next steps for INPAS involve its adoption by country governments and voluntary adoption by nonprofits and donors seeking a harmonized approach to financial reporting. As the standard gains traction, it may lead to broader acceptance and implementation across the nonprofit sector globally. This could result in a shift towards more standardized financial practices, enhancing the overall efficiency and effectiveness of nonprofit organizations.
