Annual Financial Reporting Obligations for Bowls Clubs

from AUGUST 2023

Men’s Classic Pairs at Hervey Bay Bowls Club

When the Gregorian calendar was adopted by the Catholic Church in 1582, Spain and Portugal followed soon after, and it was only a matter of months before France, too, fell into line with the Church. Britain and the British Empire did not adopt the calendar until 1752, and the likes of Sweden, Japan, and many others came after that. In 1912 China came on board, and in 2016 Saudi Arabia became the most recent country to adopt the Gregorian calendar, which is now used in all but five countries throughout the world.

It is because of this history that the vast majority of us celebrate the new year every 1 January. And yet, for bowls clubs and other organisations, the financial year is a different matter entirely.

Many bowls clubs mark the start of the financial year in July or January, but others do so in April, September, or other months. Recently, I reviewed the Constitution of a club which has the start of its financial year in November. But whenever your financial year may commence, for many of us, 1 July is an important marker and an opportunity to take stock of what we have achieved in the calendar year to date. It’s also a suitable juncture to take stock of your bowls club’s financial reporting obligations.

Changes for Incorporated Associations

If your bowls club is established as an incorporated association under the Associations Incorporations Act, then from 1 July 2023, your annual reporting obligations may have changed depending on whether your bowls club is a large, medium or small association as follows:

1. “Large incorporated associations” (previously known as Level 1 associations) include those with either:

1.1 current assets of more than $1 million (up from $100,000); or

1.2 total revenue of more than $500,000 (up from $100,000).

2. “Medium incorporated associations” (previously Level 2 associations) will have either:

2.1 current assets of $300,000 to $1 million (up from $20,000 to $100,000); or

2.2 total revenue of $150,000 to $500,000 (up from $20,000 to $100,000).

3. “Small incorporated associations” (previously Level 3 associations) will have less than $300,000 in current assets (up from $20,000) and less than $150,000 in revenue (also up from $20,000).

Large associations must appoint a suitable person, such as a certified accountant or a registered auditor, to audit their financial statements within six months of the end of the bowls club’s financial year.

Medium and small associations must also have their accounts audited by a certified accountant or a registered auditor if they operate poker machines or conduct other activities requiring a full audit. However, those who do not fall into this category may be able to avoid a full audit and instead have an auditor, accountant, or person approved by the Office of Fair Trading provide a statement that they have examined the club’s financial records which show the club has adequate bookkeeping processes in place to correctly record and explain transactions to enable a true and fair financial statement to be prepared. An exception may apply if the members of the club require a full audit to be prepared.

Associations that are registered with the Australian Charities and Not-for-profits Commission (ACNC) may be exempt from annual reporting with the Office of Fair Trading reporting, as long as they satisfy an ACNC annual reporting requirement.

Companies Limited by Guarantee

If your club is registered as a company limited by guarantee then there has not been any change to the financial reporting requirements. Similar to incorporated associations, under the Corporations Act there is a three-tier reporting framework companies limited by guarantee as follows:

1. Small companies limited by guarantee that have revenue (or consolidated revenue) of less than $250,000 for the financial year are not required to prepare financial reports or have them audited unless directed by a member or by ASIC. This exception does not apply if the club operates poker machines.

2. Companies limited by guarantee with annual (or consolidated) revenue of less than $1 million must prepare financial reports and can elect to have their financial reports reviewed by a practising accountant, rather than audited by a registered company auditor. However, their reports must be audited where poker machines are operated by the club.

3. Companies limited by guarantee with annual (or consolidated) revenue of more than $1 million must prepare a financial report and have it audited by a registered company auditor.

If you have any questions about your club’s financial reporting requirements then please call me, Matt Bradford, at 07 3224 0353.

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