Co-operatives must keep written financial records that correctly record and explain their transactions and financial position and performance. The records must enable financial statements to be prepared and audited.
Financial records must be retained for seven years after the transactions covered by the records are completed. The records may be kept in any language, however, an English translation must be available. If kept in an electronic form the records must be able to be converted into hard copy within a reasonable time.
Different reporting requirements apply for small and large co-operatives.
Co-operatives that are disclosing entities have additional reporting requirements and should consult their legal or financial adviser regarding these obligations.
Determining if you are a small co-operative
A co-operative is small if it satisfies at least two of the following criteria:
- the consolidated revenue of the co-operative and the entities it controls (if any) is less than $8 million for the financial year
- the value of the consolidated gross assets and the entities it controls (if any) is less than $4 million at the end of the financial year
- the co-operative and the entities it controls (if any) has fewer than 30 employees at the end of the financial year.
The co-operative must also have:
- no securities on issue to non-members during that year other than securities issued to former members on the cancellation of their membership; or
- not issued shares to more than 20 members in a financial year. Or if it is has done this, the amount raised by issuing those shares does not exceed $2 million.
The Co-operatives National Regulations detail calculations for a number of employees, consolidated revenue and consolidated gross assets to determine if a co-operative is a large co-operative.
All other co-operatives are large co-operatives.
Small co-operatives – financial reporting
Each financial year, a small co-operative must prepare a report for its members containing:
- an income and expenditure statement setting out the appropriately classified individual sources of income and individual expenses incurred in the operation of the co-operative
- a balance sheet, including appropriately classified individual assets and liabilities of the co-operative
- a statement of changes in equity
- a cash flow statement is required if the co-operative and any of its controlled entities has consolidated revenue of $750,000 or greater, or if the value of the consolidated gross assets is $250,000 or greater
The financial statements must present a true and fair view of the co-operative’s financial position, performance and cash flows. They must also include:
- comparative figures for the previous financial year
- a statement of significant accounting policies.
An audit or review of a small co-operative’s financial statements and /or additional financial reports, may be required if it is:
- specified in the co-operative’s rules
- requested by its members or the Registrar under the Co-operatives National Law.
Small co-operatives need to report to members within five months of the end of the co-operative’s financial year.
Small co-operatives must lodge an Annual return (form C12) (PDF, 1314.54 KB), together with the prescribed fee, with NSW Fair Trading within five months after the end of their financial year.
Large co-operatives – financial reporting
Any co-operative that does not satisfy the requirements for a small co-operative is a large co-operative.
Each financial year, a large co-operative must prepare and present to its members:
- the financial report for the year
- the directors’ report for the year
- an independent auditor’s report on the financial year
- a concise report.
The financial report must be prepared in accordance with the Australian Accounting Standards. It must include the co-operative’s:
- income statement
- balance sheet
- statement of changes in equity
- cash flows statement
- directors’ declaration
- notes to the financial statements. These must include:
- notes required by the accounting standards
- disclosure required by the National Regulations
- any other information necessary to give a true and fair view.
A concise report consists of:
- a concise financial report in accordance with accounting standards
- the directors’ report for the year
- a statement by the auditor that the financial report has been audited and whether the concise financial report complies with the relevant accounting standards
- a copy of any qualification in the auditor’s report and
- a statement that the report is a concise report and a full report is available upon request and free of charge.
Large co-operatives need to report to members within five months after the end of the financial year.
Large co-operatives must lodge an Annual report (form C13) (PDF, 1300.55 KB), together with the prescribed fee, with NSW Fair Trading within five months after the end of their financial year.
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