Tier 2 associations financial reporting

Tier 2 associations are those whose:

• total revenue as recorded in the income and expenditure statement (i.e. gross receipts) for a financial year is $250,000 or less, and
• current assets are $500,000 or less.

Current assets refers to assets (other than real property or assets that are capable of depreciation) held by the association as at the end of the association's last financial year. It includes amounts held in financial institutions, stocks and debentures.

Before the annual general meeting (AGM)

As soon as practical after the end of the association’s financial year the committee must:

1. Prepare financial statements that include:
   • an income and expenditure statement that sets out appropriately classified individual sources of income and individual expenses incurred in the operation of the association
   • a balance sheet that sets out current and non-current assets and liabilities
   • a separate income and expenditure statement and balance sheet for each trust for which the association is the trustee, and
   • details of any mortgages, charges and other securities affecting any property owned by the association.
2. Consider the financial statements and confirm that they provide a true and fair view of the association’s financial performance. It is good practice to record this confirmation in the minutes of the committee meeting.
3. Ensure the AGM is held within six months of the end of the financial year.

Audit of financial statements

NSW Fair Trading does not require Tier 2 association’s financial statements to be audited however, it may direct an association to conduct an audit and request an auditor’s report.

An association’s constitution or funding arrangements may require an audit.

At the annual general meeting

The committee must:

1. Arrange for the financial statements to be submitted to the meeting.
2. Ensure a copy of the financial statements and a record of any resolution passed concerning the statements is included in the minutes of the AGM.

After the annual general meeting

Within 1 month following the AGM the committee must lodge with Fair Trading:

1. The Annual summary of financial affairs – Tier 2 form A12-T2 (PDF, 1030.92 KB)
2. Payment of the prescribed lodgement fee.

The financial statement presented to members at the AGM and other documents such as the minutes, agenda and notice of meeting are not required to be lodged, unless specifically requested by Fair Trading.

Extension of time

An association should apply for an extension of time if it cannot hold its annual general meeting within 6 months after the end of its financial year or lodge its Annual summary of financial affairs by the due date. This can be done by lodging an Application for extension of time for holding annual general meeting or lodging annual summary of financial affairs (PDF, 988.11 KB)

The form should be lodged as soon as possible after the association becomes aware that it will be unable to comply with its obligations under the Act.

Exemption for registered charities

A NSW association also registered as a charity with the Australian Charities and Not-for-profits Commission (ACNC) may take advantage of an exemption and are not required to lodge its annual summary of financial affairs with Fair Trading or pay the annual lodgement fee.

To take advantage of this exemption, The ACNC’s Annual Information Statement  for NSW organisations includes additional questions to collect information on behalf of Fair Trading. A NSW association (also registered as a charity with the ACNC) must lodge its Annual Information Statement (and financial statements if required) with the ACNC each financial year and must answer all questions. The ACNC will then share this information with Fair Trading.

Associations must continue to hold their AGM within 6 months of their financial year end date. All financial statements must be prepared as required by the Associations Incorporation Act 2009 and be submitted to members at this meeting. As a Tier 1 association this would include preparing and providing an audit report.

All associations must continue to notify Fair Trading of any changes such as the association’s name, details, constitution or public officer.

You can confirm your association’s status by searching the ACNC charities register.

For information about reporting obligations to the ACNC, visit the ACNC website.

All associations must continue to notify Fair Trading of any changes such as the association’s name, constitution or public officer or its official address.

Related information

Associations Incorporation Act 2009 Exemption order No. 001/18 (PDF, 174.2 KB)

Associations Incorporation Act 2009 Regulatory Guide A1 (PDF, 368.77 KB)

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