Charity sector
The Charities Regulator has published a report on the sector in Ireland, showing that around half of charities say they are in a stronger position than two years ago, although about a third believe trust in the sector has declined since 2022. The research found that many charities do not include their registered charity number on fundraising materials, which is a requirement under the new Charities (Amendment) Act 2024.
The report identifies the need for accountants to ensure financial statements reflect increasing cost pressures and risk assessments, given the likely impacts of inflation, staffing and funding uncertainty. Regarding governance, accountants could have a supporting role in board training in the areas of financial literacy, succession plans, and designing and implementing policies around risk and conflict of interest, as well as emphasising the importance of understanding income streams, ensuring diversified revenue, planning for lean years and managing reserves.
Changes to credit union lending regulations aim to increase capacity by €7bn
Credit union lending
The Central Bank of Ireland has announced changes to credit union lending regulations: house lending will now have a limit of 30% of total assets and business lending will have a limit of 15% of total assets. This aims to increase lending capacity in the sector by €7bn.
In a separate report, according to the Central Bank of Ireland, the additional credit – ie development finance – needed to help meet housing demand in Ireland is estimated at about €6.5bn to €7bn above current levels.
Credit unions only have on-demand deposits and under the new rules will have substantial lending over 30 years, creating an asset/liability mismatch that will need to be monitored and managed. Very few are expected to finance their increased mortgage lending solely from their on-demand deposit base, and the sector is likely to see the rise of corporate credit unions and securitisation of the mortgage book.
FRS 102
The Financial Reporting Council (FRC) has issued two new factsheets to support entities applying FRS 102:
- FRS Factsheet 12, Presentation of the financial statements sets out the options available to entities applying FRS 102 (including small entities) for presenting the financial statements, particularly in relation to the statutory and adapted formats for the balance sheet and the profit and loss account.
- FRS Factsheet 13, The Going Concern Basis of Accounting for Small Companies and Micro-entities will support directors of small companies and micro-entities as they perform their going concern assessments and disclose their conclusions, including how these conclusions were reached.
Small company auditors
The FRC has published a Practice Note Exposure Draft, Guidance for audits of smaller and/or less complex entities, to help auditors deliver more proportionate audits of SMEs.
Audit vs assurance
The FRC has issued a podcast, In Conversation: What’s the difference between statutory audit and assurance?
Sustainability
The European Securities and Markets Authority has issued a thematic note on sustainability-related claims used in non-regulatory communications. The note concludes that these should be clear, fair and not misleading, and provides examples of good and bad disclosures.
EFRAG has released two reports to support the application of the Voluntary Standard for SMEs (VSME), a sustainability reporting framework. The first report provides practical support to SMEs that wish to report their greenhouse gas emissions, with links to a number of calculation tools. One of the links is to the Irish Government climate toolkit. The second report provides an overview of the 223 platforms and initiatives supporting VSME reporting.
The Companies Registration Office has recommenced involuntary strike-off
ISSA 5000 implementation
The International Auditing and Assurance Standards Board is hosting a webinar series in October to assist sustainability assurance service providers (SASPs), covering engagement acceptance, assessing risks and designing and performing procedures, and concluding and reporting. The webinars should count towards the 60 hours’ CPD requirement for grandfathering SASP applicants.
Taxation of partnerships
Revenue recently released an ebrief on taxation of partnerships, which, as well as dealing with the taxation of partnerships, contains an explanation of the different types of partnership available under Irish law, as well as information on joint and several liability.
Companies House filing
Companies House in the UK will shortly require third-party agents, who file information on behalf of clients, to be registered as authorised corporate service providers (ACSPs). ACSPs are referred to as trust or company service providers in Ireland. Irish accounting practices filing information for UK clients in Companies House will be required to register.
However, to be an ACSP with Companies House you currently need to have a UK address. ACCA and CCABI are engaging with the UK government and Companies House to amend the regulation to allow Irish practices to register. Find out more about Identity verification and ACSPs.
Involuntary strike-off
The Companies Registration Office has recommenced the involuntary strike-off process. Approximately 35,000 companies are facing involuntary strike-off due to a failure to file annual returns. Find out more.
