For the non-profit sector, a significant step was taken — the International Non-Profit Reporting Foundation (INPRF) has officially published the first-ever global accounting standard tailored explicitly for non-profit organizations, known as the International Non-Profit Accounting Standard (INPAS). The new standard was developed through years of collaborative effort, promising to reshape how charitable institutions, NGOs, and socially driven entities report, manage, and communicate their financial matters.
Why INPAS is a game-changer
Non-profit organizations have been experiencing difficulties in meeting reporting requirements for a long time, including the need to accommodate different donors’ demands for various formats, auditors applying different applicable rules, and organizations struggling with maintaining numerous sets of books and inconsistent transparency. As deemed by the Devex Analysis, an NGO leader described those situations as “a complete mess out there”.
Therefore, INPAS bridges these gaps by providing a framework for financial reporting tailored to non-profit situations that is aligned with the accounting standards themselves, such as being a stand-alone and accrual-based system. Such benefits can now be expected and considered significant in the field:
- Consistency: Organizations from different countries and jurisdictions can now convey reports using a common standard.
- Credibility: Regulators, funders, and donors can gain increased confidence and reliability in the financial statements of the said organizations.
- Efficiency: Auditors and organizations can now reduce duplication of efforts by converging on a single set of requirements rather than multiple sets.
- Transparency & Comparability: With standard requirements and such disclosures, narrative reporting and financial reporting become more meaningful.
Key Features of INPAS
The standard serves as a common ground for financial reporting of non-profit organizations and indicates the following features to be followed:
- Accrual basis of accounting: INPAS implements the accrual basis of accounting, rather than the cash-based method, which follows the Matching Principle of GAAP, enabling better matching of income and expenses in each period.
- Narrative reporting guidance: INPAS also emphasized how organizations would report beyond the numbers, like telling their financial position and financial performance
- Treatment of grants and fund restrictions: The standard provides clear guidelines on how to recognize grant income, handle restricted or unrestricted funds, and the manner of presentation in the financial statements.
- Global applicability and co-creation: The INPAS was developed with thorough input from hundreds of organizations across countries worldwide, ensuring it was built from the ground up for this sector.
Who Developed It & What’s Next
The development of INPAS can be traced back to its former project name, IFR4NPO, a global initiative aimed at establishing accounting guidelines for non-profit organizations. Subsequently, the newly formed INPRF, co-led by organizations such as Humentum and the Chartered Institute of Public Finance & Accountancy (CIPFA), serves as the institution for INPAS and for its ongoing governance.
From now on, the goal is shifted to adoption and implementation across national standard-setters, donors, regulators, and the non-profit organizations themselves. For example, in Kenya, the Institute of Certified Public Accountants of Kenya (ICPAK) has signalled phased implementation support starting in 2026.
What This Means for Philippine Non-Profits and NGOs
For non-profit organizations operating in the Philippines and in similar jurisdictions, INPAS offers a timely opportunity to:
- Align with the best practices, elevate credibility and confidence with international donors
- Ease audit and financial reporting requirements when donors or standard-setters adopt the new standard
- Position the NGO or Charitable Institution to respond to future regulations or standard changes as the global initiative spreads locally.
- Utilize the standard as a means to improve internal governance of finances, promote transparency, and enhance stakeholder trust.
With All of These in Mind
The publication of INPAS marks a significant milestone that will transform the non-profit sector globally. Through a dedicated reporting standard that reflects the uniqueness of non-profit funding, governance, and accountability, the INPRF has laid the foundation for more transparent, comparable, and confident financial reporting.
For non-profits in the Philippines and other countries, implementing this new standard is not just for the sake of compliance — it represents a significant opportunity to build trust, optimize operations, and align with a global movement that aims for improved financial stewardship.
As the shift towards the new non-profit accounting standard continues, Babylon2k is here to help organizations understand, prepare, and adapt to international standards.
📩 Get in touch and let’s build a future of transparency together!
