Draft of second accounting principle on not-for-profit entities out for consultation

The definition of the paths to follow in the process of recording and measurement of donations in the annual accounts – this is the aim of the second accounting principle on not-for-profit entities drawn up by the expert group of the Agenzia per il Terzo Settore, Consiglio nazionale dei Commericalisti (CNDCEC) and Organismo Italiano di Contabilità (OIC). The document, downloadable from the Web sites of the three organizations, will be available for public consultation until 15 May.

This second principle examines the issues pertaining to accounting for donations, starting from the premise that not-for-profit entities use an accrual-based accounting system, as envisaged under accounting principle no. 1, but also identifying technical measures for not-for-profit entities that adopt a cash-flow recording system. For the purposes of the document, “donations” means those acts with the following distinguishing characteristics: enrichment of the beneficiary with a corresponding reduction in the wealth of the party performing the act, and the spirit of giving (in the sense of an act of generosity performed in the absence of any form of pressure).

Attachments: press release and the principle out for consultation.