First global accounting standard for non-profits launched

The first international accounting standard designed specifically for non-profit organisations has been launched, marking a “major milestone for transparency and accountability” in the sector.

The International Non-Profit Accounting Standard (INPAS) was published by the newly formed International Non-Profit Reporting Foundation (INPRF), backed by founding members the Chartered Institute of Public Finance and Accountancy (CIPFA) and Humentum, a global nonprofit.

The non-profit body was established to develop and promote globally accepted financial reporting standards for the sector, and the framework was developed over six years. 

INPAS provides a standalone, accrual-based framework that reflects the funding models and reporting needs of non-profit organisations. It includes guidance on grant income recognition, narrative reporting, and the presentation of restricted and unrestricted funds. A Practice Guide for harmonised grant reporting is also included.

The initiative involved input from 358 organisations across 86 countries and engagement with around 15,000 individuals. INPAS draws on existing international frameworks, including the International Financial Reporting Standard (IFRS) for Small and Medium-sized Entities and the International Public Sector Accounting Standards (IPSAS).

It comes as more than 90% of countries do not have standardised financial reporting for non-profits. INPRF said the next step would be adoption by governments and voluntary use by non-profits and donors seeking a consistent approach to financial reporting.

CIPFA chief executive Owen Mapley said: “For the first time, non-profits have an accounting standard built entirely around their operational realities. INPAS will help organisations demonstrate stewardship of resources, meet donor and public expectations and strengthen trust through transparent, comparable reporting.”

Humentum co-chief executive Chris Proulx said the framework would reduce the administrative burden on organisations.

He added: “The non-profit sector effectively manages billions of dollars annually. This standard is a game changer – its adoption will ease the burden of multiple grant reports and audits, streamline due diligence, and will give funders even greater confidence in financial information.”

Ian Carruthers, chief executive of INPRF, concluded: “Its development over the last six years through the IFR4NPO project has been a fantastic example of global co-creation for the sector by the sector. As the new CEO of INPRF, which has been specifically created to provide its long-term home, I am delighted that we are finally able to publish this long-awaited ground-breaking guidance.”