Financial reporting standards for small societies

Operating payments are expenses that have been paid for by your society, including:

• Payments related to public fundraising, including (e.g. promotion and marketing). 
• Employee and volunteer related costs (e.g. salaries, wages and petrol)
• Payments related to providing goods or services (e.g. utilities and insurance)
• Grants and donations paid
• Other operating payments (e.g. affiliation fees).

This reflects cash accounting and does not include accrual-based accounting concepts like depreciation or money owed. Capital expenditures, such as payments for land, buildings, furniture and office equipment, are also not included in this figure. 

Total current assets is defined in the regulations and means the total value of the society’s assets that satisfy one or more of the following criteria:

1. The society expects the asset to be realised, consumed, sold, or otherwise disposed of within 12 months after the society’s balance date of the relevant financial year.
2. The asset is primarily held for the purpose of being traded.
3. The asset is cash or a cash equivalent and is not restricted from being exchanged or used to settle a liability for at least 12 months after the society’s balance date of the relevant financial year.

The same asset may be considered current or non-current depending on how you intend to use it, which is illustrated in the table below.

Your reporting requirements may vary year to year depending on your operating payments and total current assets. To always fall within the minimum standards requirement in the 2022 Act, your society must consistently meet the ‘small society’ criteria.

The tests for ‘total operating payments’ and ‘total current assets’ take the previous 2 financial years into account.

How the criteria could change year to year

If you do not meet the ‘total current assets’ threshold in one financial year it will impact your society’s reporting requirements for its next 2 reporting years. 

In the example below the total current assets for 31 March 2026 impact the 2027 and 2028 reporting years.

Your society can choose to report on either its:

• receipts and payments (cash accounting) — the actual cash inflows and outflows that took place,
• income and expenditure (accrual accounting) — revenues and expenses your society has incurred during a specific period, regardless of whether cash was received or paid.

Your society must also report on its assets and liabilities.

Assets are things of value your society owns.

Your financial statements should include all:

• current assets (for example, cash), and 
• fixed assets (for example, buildings)

Liabilities are the debts and obligations that your society owes to other parties.

Your financial statements should include all:

• current liabilities (for example, current unpaid rental or electricity invoices, or portion of loan principal to be repaid within the next 12 months), and
• non-current liabilities (for example, portion of the loan principle to be repaid more than 12 months after balance date).

A security interest is a legal claim on property (collateral) established to secure payment of debt or other obligation. This could include:

• a mortgage over a building of a society, or 
• a van bought on credit where the van is subject to a security interest (that is, its collateral for the loan).