May 16, 2022 Matthew Hung

Disclosing Key Management Personnel Remuneration

For the 2022 and future ACNC Annual Information Statements, large charities will be required to report remuneration of key management on an aggregated basis in their financial statements.

The ACNC has recently provided some further guidance on this requirement.  In particular:

• Entities preparing General Purpose Financial Statements are required to disclose key management personnel compensation in accordance with the accounting standards.  The number of key management personnel does not change the disclosure requirements.

• If entities are preparing Special Purpose Financial Statements, disclosure is only required when more than one key management person has been remunerated.  We note that this guidance is inconsistent with the legislation which requires disclosure where management personnel number more than one, regardless of whether remuneration has been made.
• Basic religious charities do not have to report key management personnel remuneration, regardless of size.  However if voluntarily choosing to lodge financial statements, the financial report will need to comply with this disclosure requirement and any other requirements for a charity of its size.

Remuneration includes wages, superannuation, fringe benefits and any termination benefits.

Charities with one paid management position, and thus not required to make this disclosure in their financial statements, will need to watch out when the person in that role changes, as the exemption will not apply if two individuals have been employed during the same period..  See here for more details.