A review of international financial reporting practices for nonprofits and application advice

Non-Profit Organizations, which are expressed by many different terms such as charity, non-profit sector, third sector, independent sector, voluntary organizations, associations and foundations and acting with the aim of providing social benefit, have become more and more important in the economic and social field. These organizations, which affect the public in terms of their scope and nature, are responsible to the society in terms of the management and use of the resources they entrust. In addition, as a result of the scandals experienced in non-profit organizations in the past, those who provide funds to these organizations and the society want to know more about the activities and services of the organizations. Financial reporting, which expresses the preparation and presentation of the activities carried out by the organizations within the framework of the rules determined in accordance with certain legislation, and the financial statements, which are a photograph of these services and activities, become important at this point. Non-profit organizations have different characteristics from for-profit businesses. In addition, the legislation they are subject to is also different. For this reason, nonprofits are required to be subject to different accounting practices and reporting requirements. However, there are no financial reporting frameworks for non-profit organizations in Turkey to use in the preparation of their financial statements. In this study, it is investigated how should be the financial reporting framework, which is needed by non-profit organizations in Turkey and compatible with international practices, For this purpose, in this study, first of all, the characteristics and structure of non-profit organizations and non-profit organizations within the scope of foundations and associations in Turkey are examined, then the accounting practices of non-profit organizations in Turkey are included, then international country practices regarding the financial reporting of non-profit organizations are researched. In the last section, the content of the financial reporting framework to be created for non-profit organizations operating in Turkey is given.