INPAS FAQs

INPAS is the first internationally recognized accounting standard specifically designed for the Non-Profit Organisations (NPOs). Unlike the private and public sectors, there is no current global standard for NPO financial reporting. INPAS provides guidance for preparing whole-of-entity financial statements and harmonized grant reports, enhancing transparency, accountability, and trust in non-profit finances globally.

NPO-specific issues were prioritised for inclusion in the first edition of INPAS based on the feedback to a Consultation Paper issued in January 2021. The main issues are:

• accounting for grants and donations (received and made)
• presentation of information in the financial statements
• classification of expenses including support costs and fundraising costs
• fund accounting
• foreign currency translation
• narrative reporting.

Stakeholders identified narrative reporting as being critically important to understanding what an Non-Profit Organisation (NPO) has achieved, its objectives and governance. For these stakeholders narrative reporting has equal importance to financial information in discharging accountability. It has therefore been included in INPAS.

The INPAS Secretariat welcomes feedback on INPAS. If you have any comment on INPAS send these to info@inprf.org

Non-Profit Organisations (NPOs) face unique financial reporting challenges, including reliance on donor funding and mission-driven operations. INPAS addresses these by offering a globally consistent, credible framework that reduces inefficiencies and administrative burdens while improving financial reporting quality.

• Streamline operations: By eliminating redundant reporting formats
• Enhance credibility: By improving financial report quality and assurance
• Increase funding: By supporting fundraising and grant-making due diligence
• Improve transparency: By enabling clear reporting of unrestricted funds and support costs
• Strengthening financial resilience: By tracking and justifying reserves effectively
• Enable comparability: with the same requirements applying within the same country and across borders

International Financial Reporting Standards are written to apply to for-profit organisations. They do not provide comprehensive guidance for some common aspects of non-profit financial reporting, such as grants and donations, fund accounting and assets held for social purpose rather than income generation. International Public Sector Standards (IPSAS) address these in part, but from a public sector perspective rather than from the non-profit perspective, with some important differences.

Unlike standards developed for the for-profit or public sectors, INPAS addresses the unique non-profit issues. Unlike national standards for Non-Profit Organisations (NPOs) (such as FASB ASC 958 in USA or Charities SORP in UK), it is globally applicable, designed to be suitable for NPOs across different countries.

Yes. Recommendation 8 requires countries to apply focused, proportionate and risk-based measures to protect NPOs from terrorist financing abuse — covering false fronts, conduits for moving funds, and diversion of legitimate donations — without unduly disrupting legitimate NPO activity. The underlying principle is that good accountability and transparency systems serve both goals simultaneously: protecting the integrity of NPOs and preventing their exploitation by terrorists.

FATF is explicit that such measures should “promote accountability and engender greater confidence among NPOs, across the donor community, the financial institutions and with the general public, that NPO funds and services reach intended legitimate beneficiaries” (INR.8, B5c), and that countries should have “clear policies to promote accountability, integrity and public confidence in the administration and management of NPOs” (INR.8, 7Ai). High-quality, comparable financial statements are central to delivering this — but their value as an oversight tool depends on their consistency and relevance to the sector.

INPAS addresses this directly, ensuring that NPO financial statements provide relevant information about on grants, donations, restricted funds and programme expenditure, that regulators can use to assess whether charitable resources are being used as intended. Adopting INPAS can therefore support a country’s implementation of Recommendation 8 not by adding regulatory burdens, but by improving the quality of the transparency infrastructure that Recommendation 8 relies upon — making it a focused, proportionate measure entirely in the spirit of the risk-based approach FATF requires.

INPAS is designed to be scalable and accessible for small and medium Non-Profit Organisations (NPOs). It is particularly suited for organisations applying accrual accounting to meet the needs of their financial statement users.

It is not intended to apply to micro sized entities, but such entities might benefit from the Standard, particularly as it grows over time.

It is also not intended to apply to larger organisations that have public accountability as defined in IFRS accounting standards.  However, larger entities may benefit from accessing the approaches to NPO-specific transactions.

• Regulators: Can adopt INPAS as a mandatory or permitted standard for Non-Profit Organisations (NPOs).
• NPOs: Can voluntarily adopt INPAS to enhance transparency and credibility.
• Funders: Can promote INPAS and its accompanying Practice Guide 1 (INPAS Guide 1) to align grant reporting with audited financial statements.

The mandatory use of INPAS depends on local regulations. Each country can decide whether to adopt INPAS or allow its use. It can also decide whether it applies to all Non-Profit Organisations (NPOs) among national NPOs or specified NPOs. However, NPOs may be able to voluntarily adopt it to improve credibility and align with international best practices.

• Regulators: Adoption means requiring or allowing certain NPOs within their jurisdiction to prepare whole-of-entity financial reports in accordance with INPAS.
• NPOs: Adoption involves preparing financial statements and grant reports according to the requirements of INPAS and/or INPAS Guide 1.
• Funders: Adoption means requiring or allowing grantee NPOs to prepare grant accountability reports in accordance with INPAS Guide 1.

It is not generally appropriate for donors to prescribe organisation-wide reporting for Non-Profit Organisations (NPOs). NPOs will be required to follow local regulation. It is hoped that donors will recognise INPAS as representing best practice for whole-of-entity reporting, and allow use of the complementary INPAS Guide 1 for grant reporting.

INPAS was created over six years through extensive consultation with direct input from 375 organizations and individuals in over 60 countries. Since 2019, the initiative has amassed a following of 15,000+ individuals from 169 countries. INPAS was developed with input from volunteer advisory and reference groups including:

• Technical Advisory Group (TAG) – national accounting standard setters from every continent (and IASB as official observers)
• Practitioner Advisory Group (PAG) – NPOs, auditors, consultants, academics
• Donor Reference Group with bilateral and multi-lateral funders and foundations.
• Engagement supported by 50+ volunteer Country Champions
• Oversight by independent Governance Group

INPAS was developed using a robust due process that provided inclusivity, transparency and technical rigour.

A conceptual framework has not been separately developed for the first edition of INPAS because of the time and resources required.  The concepts and pervasive principles, which are based on those of the IFRS for SMEs Accounting Standard, have been modified to reflect NPO-specific issues.

INPAS is based on the IFRS for SMEs Accounting Standard.  Modifications have been made to meet the specific needs of Non-Profit Organisations (NPOs). Some material has been modified and there have been editorial changes.  New material has been written where an NPO-specific was not addressed. These developments have followed the underlying principle that where a transaction is the same for a NPO as a for-profit organisation, no amendment is made. Other international financial reporting standards have been used to inform the development of new material where appropriate.

Subsequent editions of INPAS will address issues not covered in the first edition of INPAS. The prioritisation of issues will be decided based on feedback from stakeholders to further Consultation Papers and will be subject to the resources available. The meetings of the Technical Advisory Committee (TAC) and Practitioner Advisory Committee (PAC) are fully public. The agendas, meeting papers, meeting recordings and decisions are all recorded.

The meetings of the Technical Advisory Group (TAG) and Practitioner Advisory Group (PAG) are fully public. The agendas, meeting papers, meeting recordings and decisions are all recorded.

Consultations Papers are issued to obtain feedback from a wide range of stakeholders on the issues presented.  This feedback provides an evidence base for the further development of INPAS.

EExposure Drafts contain drafts of sections of or all of INPAS. They present proposed treatments together with rationale and implementation guidance.  Everyone is welcome to respond to a Consultation Paper or Exposure Draft to comment on the proposals and/or explain the impact they would have in their own context. Comments must be provided in English.

The INPAS Secretariat reviews all feedback received, analysing it to identify the common themes and key issues. This analysis is used to determine what changes, if any are to be made to the proposals.  The analysis of the responses to the questions raised in each consultation document can be found in the papers to the Technical Advisory Group.

INPAS is being developed in English. Official translations will be made into Spanish and French.  For translation into other languages approval must be sought.

INPAS development has taken account of the ‘Good Financial Grant Practice’ and the ‘Money Where it Counts’ initiative. This latter initiative is the foundation for the proposals for INPAS Practice Guide 1 – Harmonised grant reporting.

INPAS Guide 1 provides a harmonised format for grant or project financial reports. It provides templates for Supplementary statements that present key financial information about projects, grants, or activities in a standardised and reconcilable format. It ensures alignment between grant reports and audited financial statements prepared under INPAS or other accrual-based financial reporting frameworks. It makes the reporting process simpler and more efficient for both Non-Profit Organisations (NPOs) and funders.

Adopting INPAS Guide 1 involves Non-Profit Organisations (NPOs) and funders agreeing to use its standardised format for grant and project financial reporting through Supplementary statements.

NPOs: this means preparing Supplementary statements using the INPAS Guide 1 expenditure headings, and preparing the required reconciliations to the audited financial statements.

Funders: this entails allowing or requiring grantees to submit reports in the INPAS Guide 1 format.

INPAS Guide 1 is mutually beneficial – designed to benefit both funders and Non-Profit Organisations (NPOs) globally. It is voluntary and allows flexibility to enable NPOs to adapt it to their specific needs while providing funders with consistent and transparent reporting.

INPAS Guide 1 provides significant benefits to funders by:

• Improving visibility on how grants are used.
• Enhancing transparency and accountability by linking individual grant reports to the whole-of-entity financial statements.
• Enabling more informed funding decisions through standardised reports that allow comparability.

INPAS Guide 1 tackles key challenges for NPOs by:

• Standardising expenditure headings.
• Minimising administrative burdens, freeing up time and resources for mission-driven work.
• Simplifying the overall reporting process.

INPAS Guide 1 was developed by a group that included donors, standard setters and preparers. It included input from diverse stakeholders in 61 countries, ensuring it reflects the realities of nonprofits operating in different contexts.

No. The headings are designed to be accessible and adaptable for Non-Profit Organisations (NPOs) of all sizes. They cannot be amended or expanded.

NPOs can voluntarily consider using the expenditure headings in INPAS Guide 1 for budgets and for their financial statements as this may simplify reporting.

Non-Profit Organisations (NPOs) can choose where to publish its Supplementary statements. While INPAS Guide 1 encourages alignment between the Supplementary statements and audited financial statements, they do not have to be published as an annex to an NPO’s financial statements. However, publishing as an annex may provide benefits for NPOs, donors and external users of the financial statements.

INPRF is an independent organisation that is governed by Members and a Board of Trustees. Organisations that meet the criteria for being a Member may apply to INPRF to be admitted. Trustees are appointed as individuals. Trustees are geographically diverse and come from a variety of backgrounds with a common purpose of furthering high-quality financial reporting for NPOs. INPRF is currently funded through philanthropic donations.

Members must be organisations that operate for non-profit purposes and are interested in furthering the objectives of high-quality financial reporting for non-profit organisations. Organisations interested in becoming a member of INPRF should contact us at info@inprf.org

Trustees are individuals that are appointed by the Members. Trustees will have a professional background relevant to the furtherance of high-quality financial reporting for non-profit organisations. Trustees will be geographically diverse and come from a variety of backgrounds. INPRF will periodically call for nominations for Trustees.

The first edition of INPAS has been funded by philanthropic donations. These donations have come from four US based Foundations.

INPRF is currently funded by philanthropic donations. A longer-term funding strategy is being put in place to provide sustainable funding from more diverse sources.

You can show your support for INPAS by adding your logo to the INPRF website. If you would like to make a financial donation, contact us at info@inprf.org

We welcome the sponsorship of webinars and consultative events. If you are interested in sponsoring an event, contact info@inprf.org.