Co-operatives financial reporting

Financial records

Co-operatives must keep written financial records. They must accurately record and explain their transactions, financial position, and performance. The records must enable financial statements to be prepared and audited.

Financial records must be kept for 7 years after the transactions are done. The records may be kept in any language, however, an English translation must be available. If kept in an electronic form the records must be able to be converted into hard copy within a reasonable time.

Reporting requirements

Different reporting requirements apply for small and large co-operatives.

Disclosing co-operatives have extra reporting requirements. They should consult their legal or financial adviser about these obligations.

Determining if you are a small co-operative

A co-operative is small if it satisfies at least 2 of the following criteria:

• the consolidated revenue of the co-operative and the entities it controls (if any) is less than $8 million for the financial year
• the value of the consolidated gross assets of the co-operative and the entities it controls (if any) is less than $4 million at the end of the financial year
• the co-operative and the entities it controls (if any) has fewer than 30 employees. This is at the end of the financial year. 

The co-operative must also have:

• no securities on issue to non-members during that year other than securities issued to former members on the cancellation of their membership; or
• not issued shares to more than 20 members in a financial year. If it has done this, the amount raised by issuing those shares does not exceed $2 million.

The Co-operatives National Regulations explain some key calculations. This includes:

• how to calculate the number of employees
• how to calculate consolidated revenue
• how to calculate gross assets.

Co-operatives that do not meet the above criteria are large co-operatives.

Small co-operatives – financial reporting

Each financial year, a small co-operative must prepare a report for its members. The report must contain:

• an income and expenditure statement. It should classify the individual sources of income and the expenses of running the co-operative
• a balance sheet, including appropriately classified individual assets and liabilities of the co-operative
• a statement of changes in equity
• A cash flow statement. This is required if the co-operative and its controlled entities have either:
  • consolidated revenue of $750,000 or more, or
  • consolidated gross assets worth $250,000 or more.

The financial statements must show an accurate and fair view of the co-operative’s finances, performance, and cash flows. They must also include:

• comparative figures for the previous financial year
• a statement of significant accounting policies.

An audit or review of a small co-operative's financial statements may be required if it is:

• specified in the co-operative’s rules
• requested by its members or the Registrar under the Co-operatives National Law.

Small co-operatives must report to members within five months after its financial year. They must also lodge a Form C12 Annual return within the same period.

Lodgement, with a fee receipt, is accepted by post, email, or in person at a Service NSW centre.

Large co-operatives – financial reporting

Any co-operative that fails to meet the requirements of a small co-operative is a large co-operative.

Each financial year, a large co-operative must prepare and present to its members with the following:

• the financial report for the year (see below)
• the directors’ report for the year
• an independent auditor’s report on the financial year, or
• a concise report (see below).

The financial report must be prepared in accordance with the Australian Accounting Standards. It must include the co-operative’s:

• income statement
• balance sheet
• statement of changes in equity
• cash flows statement
• directors’ declaration
• notes to the financial statements. These must include:
  • notes required by the accounting standards
  • disclosure required by the National Regulations
  • any other information necessary to give a true and fair view.

A concise report consists of:

• a concise financial report in accordance with accounting standards
• the directors’ report for the year
• an auditor's statement that the financial report has been audited. It should say if the concise financial report meets the relevant accounting standards.
• a copy of any qualification in the auditor’s report, and
• a statement that the report is a concise report and a full report is available upon request and free of charge.

Large co-operatives must report to members within five months after their financial year. They must also lodge a Form C13 Annual report large co-operative, within the same time frame.

Lodgement, with a fee receipt, is accepted by post, email, or in person at a Service NSW centre.