Law on Associations

Country Reports: International

The International Journal
of Not-for-Profit Law

Volume 2, Issue 4, June 2000

CIVICUS Diamond Project Will Look at the “Legal Space” for Civil Society

CIVICUS has been working for several months now on a project to develop a “civil society index,” with major assistance from Dr. Helmut Anheier, Director of the Centre for Civil Society at the London School of Economics. In a paper published on the CIVICUS web site, Anheier explains the project and discusses the way in which the project will seek to measure, among other things, the legal space within which civil society operates. As the paper suggests, those using the CIVICUS Diamond measurement technique will look at such legal issues as freedom of association and other fundamental freedoms, tax benefits, ease of registration for tax benefits, accountability mechanisms, etc.

For further information about this project, please go to the CIVICUS web site at www.civicus.org.

G4+1 Accounting Standards

The G4+1 Group, comprising representatives of the accounting standards boards in Australia, Canada, New Zealand, UK and USA, and the International Accounting Standards Committee (IASC) have issued a discussion paper on the accounting treatment of gifts, donations, government grants and other contributions received for less than full consideration.

The paper recommends that recipient organisations should generally report the full amount of such contributions in the period in which they are received, rather than seeking to match the funds received with corresponding expenditure incurred over several accounting periods. Also, grants towards the purchase of a fixed asset should be recognised as income in the year received, rather than treated as a reduction in the cost of the asset or included as deferred income.

With regard to the appropriate treatment of funds to which conditions are attached, the paper recommends that where there are conditions that establish a right for the transferor to require the return of the transferred asset, the income should not be recognised until the conditions are met; but where the terms of the gift merely restrict the use of the asset to a particular purpose, income should be recognised when received.

Other issues addressed by the paper include:

  • when promises of funds that have not yet been received should be recognised;
  • when donated services should be recognised;
  • the appropriate accounting treatment of funds received by intermediary organisations.

The issuing bodies have invited comments on the paper, and will then consider whether existing guidance needs to be amended.

(Chartered Accountants Journal, March 2000)