Administration and annual accounts of an association or foundation
Introduction
If you are involved in the administration of an association or a foundation, you have to deal with different regulations for the administration and financial statements. Some tips can help you set up the administration properly and prepare the annual accounts.
Administration
Records must be set up to meet your administrative obligations. Usually, an association or foundation is exempt from sales tax. Nevertheless, it is advisable to take this into account in your administration to be prepared for the future. Whether you are actually exempt from turnover tax, it is advisable to contact your accountant or the Tax Administration in good time and ask for confirmation.
Special cash flows must be recorded in an association or foundation, such as contributions, donations, gifts, grants and bequests. It is important here to ensure that you have records that provide insight into the various cash flows in the statement of income and expenditure and the balance sheet. A sub-administration should also be available to monitor the recording of liabilities and entitlements. This concerns both the cash flows and also, for example, the assets, such as inventories acquired or donated with a subsidy.
Financial statements
Specific guidelines for an association or foundation financial statement have been drawn up by the Dutch Accounting Standards Board. It is important that you follow the right guidelines to provide the right insight to your users, namely:
- RJ 640 Not-for-profit organisations
- RJ 650 Fundraising institutions
- RJ 655 Care providers, youth aid provider and certified institutions
Here, incidentally, the management report should also be prepared in accordance with the guidelines.
Key specific points are:
- Recognising reserves, provisions and funds.
- Incorporating budget figures
- Inclusion of overheads
It is important that you consult with your accountant in time to meet the specific requirements for your association or foundation,
Other
If you want to obtain CBF approval, it is mandatory that you meet the requirements of RJ 650 when preparing your financial statements and management report. If you are dealing with significant subsidy streams, it is advisable to consult with your accountant in order to comply with the accountability requirements of the subsidiser and avoid inefficiencies in the various accounts, which may lead to duplication in accountancy work.