REQUEST FOR COMMENTS DRAFT ‘FINANCIAL REPORTING GUIDELINES FOR NON- GOVERNMENTAL ORGANIZATIONS (NGOs)/ NOT FOR PROFIT ORGANIZATIONS (NPOs) ENGAGED IN MICROFINANCE’

The Council has decided to expose the Draft ‘Financial Reporting Guidelines for NGOs/ NPOs Engaged in Micro Finance’ (The Guidelines) to the members of the Institute before implementation of the Guidelines.

Continuing the Institute’s initiative to develop a framework for accounting and reporting for NGOs/ NPOs, under which Circular 11/2009 titled ‘Guidelines for Accounting and Financial Reporting for NGOs/ NPOs’, was issued on October 07, 2009, the Institute has drafted the subject recommendatory Guidelines.

The Guidelines are recommended for  NGOs/ NPOs that are using micro finance as a tool for socio economic empowerment and poverty alleviation which, however, do not have a framework prescribing the principles governing the preparation and presentation of their financial statements vis-à-vis the micro finance operations; unlike the Microfinance Banks (MFBs) and Microfinance Institutions (MFIs) that are companies regulated by State Bank of Pakistan and are required to maintain and prepare their financial statements in accordance with the requirements of Companies Ordinance 1984 and the Banking Companies Ordinance 1962.

The Guidelines can be downloaded from the Institute’s website.

Members of the Institute are requested to send their comments and recommendations to the Directorate of technical services at dtscomments@icap.org.pk by March 01, 2010. Though general comments are welcome, it would be helpful if the comments include specific paragraph or section references; a clear description of the issue(s) being highlighted and provide alternative provisions supported by rationale for the suggested change.